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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  __________ to ___________

Commission file number: 1-7945
deluxelogo2020ba01.jpg

DELUXE CORPORATION
(Exact name of registrant as specified in its charter) 
MN41-0216800
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
801 S. Marquette Ave., Minneapolis, MN
55402-2807
(Address of principal executive offices)
(Zip Code)

(651) 483-7111
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareDLXNYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes    ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). ☒ Yes   ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒Accelerated Filer☐
Non-accelerated Filer ☐Smaller Reporting Company ☐
Emerging Growth Company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes   ☒ No

The number of shares outstanding of registrant’s common stock as of October 24, 2024 was 44,272,246.

1

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

DELUXE CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share par value)September 30,
2024		December 31,
2023
ASSETS  
Current assets:  
Cash and cash equivalents, including securities carried at fair value of $22,000 as of December 31, 2023
$41,307 $71,962 
Trade accounts receivable, net of allowance for credit losses
172,260 191,005 
Inventories and supplies, net of reserve39,602 42,088 
Funds held for customers41,258 383,134 
Prepaid expenses37,084 30,116 
Revenue in excess of billings
29,923 26,107 
Other current assets31,203 16,576 
Total current assets392,637 760,988 
Deferred income taxes8,745 8,694 
Long-term investments
62,285 61,924 
Property, plant and equipment, net of accumulated depreciation of $350,084 and $334,101, respectively
110,623 116,539 
Operating lease assets51,960 58,961 
Intangibles, net of accumulated amortization of $790,413 and $775,190, respectively
337,813 391,744 
Goodwill1,423,861 1,430,590 
Other non-current assets234,993 251,182 
Total assets$2,622,917 $3,080,622 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$161,126 $154,863 
Funds held for customers42,683 386,622 
Accrued liabilities152,031 191,427 
Current portion of long-term debt71,914 86,153 
Total current liabilities427,754 819,065 
Long-term debt1,459,613 1,506,698 
Operating lease liabilities51,641 58,840 
Deferred income taxes3,966 22,649 
Other non-current liabilities67,258 68,754 
Commitments and contingencies (Note 13)
Shareholders' equity:  
Common shares $1 par value (authorized: 500,000 shares; outstanding: September 30, 2024 – 44,272; December 31, 2023 – 43,743)
44,272 43,743 
Additional paid-in capital111,679 99,141 
Retained earnings490,460 491,238 
Accumulated other comprehensive loss(33,852)(30,028)
Non-controlling interest126 522 
Total shareholders’ equity612,685 604,616 
Total liabilities and shareholders’ equity$2,622,917 $3,080,622 


See Condensed Notes to Unaudited Consolidated Financial Statements

2

DELUXE CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2024202320242023
Product revenue$298,693 $304,840 $908,230 $938,872 
Service revenue229,751 233,004 692,985 716,024 
Total revenue528,444 537,844 1,601,215 1,654,896 
Cost of products(109,090)(118,050)(338,595)(361,938)
Cost of services (137,487)(137,077)(408,425)(413,799)
Total cost of revenue(246,577)(255,127)(747,020)(775,737)
Gross profit281,867 282,717 854,195 879,159 
Selling, general and administrative expense(227,764)(233,891)(695,677)(726,880)
Restructuring and integration expense(11,031)(22,935)(35,899)(60,067)
Asset impairment charge(6,700)— (6,700)— 
Gain (loss) on sale of businesses and long-lived assets5,208 (4,324)29,190 17,618 
Operating income41,580 21,567 145,109 109,830 
Interest expense(29,905)(32,034)(90,910)(93,982)
Other income, net1,834 1,316 6,560 4,562 
Income (loss) before income taxes13,509 (9,151)60,759 20,410 
Income tax (provision) benefit(4,540)1,194 (20,463)(9,186)
Net income (loss)8,969 (7,957)40,296 11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe$8,931 $(7,983)$40,193 $11,144 
Total comprehensive income (loss)$1,017 $(5,716)$36,472 $19,838 
Comprehensive income (loss) attributable to Deluxe979 (5,742)36,369 19,758 
Basic earnings (loss) per share0.20 (0.18)0.91 0.26 
Diluted earnings (loss) per share0.20 (0.18)0.90 0.25 


See Condensed Notes to Unaudited Consolidated Financial Statements


3

DELUXE CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(unaudited)

(in thousands)Common sharesCommon shares
par value		Additional paid-in capitalRetained earningsAccumulated other comprehensive lossNon-controlling interestTotal
Balance, June 30, 2024
44,210 $44,210 $106,466 $495,113 $(25,900)$587 $620,476 
Net income— — — 8,931 — 38 8,969 
Cash dividends ($0.30 per share)
— — — (13,584)— — (13,584)
Common shares issued, net of tax withholding62 62 366 — — — 428 
Employee share-based compensation
— — 4,847 — — — 4,847 
Other comprehensive loss
— — — — (7,952)— (7,952)
Dividend paid to non-controlling interest— — — — — (499)(499)
Balance, September 30, 2024
44,272 $44,272 $111,679 $490,460 $(33,852)$126 $612,685 


(in thousands)Common sharesCommon shares
par value		Additional paid-in capitalRetained earningsAccumulated other comprehensive lossNon-controlling interestTotal
Balance, June 30, 2023
43,613 $43,613 $89,380 $511,058 $(30,891)$469 $613,629 
Net loss— — — (7,983)— 26 (7,957)
Cash dividends ($0.30 per share)
— — — (13,398)— — (13,398)
Common shares issued, net of tax withholding78 78 385 — — — 463 
Employee share-based compensation
— — 4,408 — — — 4,408 
Other comprehensive income
— — — — 2,241 — 2,241 
Balance, September 30, 2023
43,691 $43,691 $94,173 $489,677 $(28,650)$495 $599,386 


See Condensed Notes to Unaudited Consolidated Financial Statements


4

DELUXE CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (continued)
(unaudited)

(in thousands)Common sharesCommon shares
par value		Additional paid-in capitalRetained earningsAccumulated other comprehensive lossNon-controlling interestTotal
Balance, December 31, 2023
43,743 $43,743 $99,141 $491,238 $(30,028)$522 $604,616 
Net income— — — 40,193 — 103 40,296 
Cash dividends ($0.90 per share)
— — — (40,971)— — (40,971)
Common shares issued, net of tax withholding529 529 (2,480)— — — (1,951)
Employee share-based compensation
— — 15,018 — — — 15,018 
Other comprehensive loss
— — — — (3,824)— (3,824)
Dividend paid to non-controlling interest— — — — — (499)(499)
Balance, September 30, 2024
44,272 $44,272 $111,679 $490,460 $(33,852)$126 $612,685 

(in thousands)Common sharesCommon shares
par value		Additional paid-in capitalRetained earningsAccumulated other comprehensive lossNon-controlling interestTotal
Balance, December 31, 2022
43,204 $43,204 $79,234 $518,635 $(37,264)$415 $604,224 
Net income— — — 11,144 — 80 11,224 
Cash dividends ($0.90 per share)
— — — (40,102)— — (40,102)
Common shares issued, net of tax withholding487 487 (728)— — — (241)
Employee share-based compensation
— — 15,667 — — — 15,667 
Other comprehensive income
— — — — 8,614 — 8,614 
Balance, September 30, 2023
43,691 $43,691 $94,173 $489,677 $(28,650)$495 $599,386 


See Condensed Notes to Unaudited Consolidated Financial Statements

5

DELUXE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Nine Months Ended
September 30,
(in thousands)20242023
Cash flows from operating activities:  
Net income$40,296 $11,224 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation16,026 14,968 
Amortization of intangibles111,690 110,017 
Asset impairment charge6,700 — 
Amortization of prepaid product discounts24,844 25,291 
Employee share-based compensation expense14,972 15,889 
Operating lease expense14,011 14,387 
Amortization of cloud computing arrangement implementation costs12,362 11,682 
Gain on sale of businesses and long-lived assets(29,190)(17,618)
Deferred income taxes(17,808)(20,406)
Other non-cash items, net31,146 24,911 
Changes in assets and liabilities:  
Trade accounts receivable6,593 (3,846)
Inventories and supplies(877)(625)
Payments for cloud computing arrangement implementation costs(475)(6,944)
Other current and non-current assets(33,581)(260)
Accounts payable8,721 10,429 
Prepaid product discount payments(22,945)(21,798)
Other accrued and non-current liabilities(48,363)(52,395)
Net cash provided by operating activities134,122 114,906 
Cash flows from investing activities:  
Purchases of capital assets(69,777)(80,809)
Proceeds from sale of businesses and long-lived assets18,321 39,872 
Other133 (9,798)
Net cash used by investing activities(51,323)(50,735)
Cash flows from financing activities:  
Proceeds from issuing long-term debt and swingline loans, net of debt issuance costs630,784 531,000 
Payments on long-term debt and swingline loans(695,295)(545,532)
Net change in customer funds obligations(338,955)(150,936)
Cash dividends paid to shareholders(40,826)(40,140)
Other(7,789)(7,982)
Net cash used by financing activities(452,081)(213,590)
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents
(3,156)993 
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents(372,438)(148,426)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year458,033 337,415 
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period (Note 3)$85,595 $188,989 


See Condensed Notes to Unaudited Consolidated Financial Statements

6
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

NOTE 1: CONSOLIDATED FINANCIAL STATEMENTS

The consolidated balance sheet as of September 30, 2024, the consolidated statements of comprehensive income (loss) for the quarters and nine months ended September 30, 2024 and 2023, the consolidated statements of shareholders’ equity for the quarters and nine months ended September 30, 2024 and 2023 and the consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 are unaudited. The consolidated balance sheet as of December 31, 2023 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles ("GAAP"). In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any items discussed in the notes below. Interim results are not necessarily indicative of results for a full year or future results. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K").

The preparation of the consolidated financial statements requires us to make certain estimates and assumptions affecting the amounts reported in the consolidated financial statements and related notes. We base our estimates on historical experience and on various other factors and assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of our assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Actual results may differ significantly from our estimates and assumptions.

Comparability – The consolidated statement of cash flows for the nine months ended September 30, 2023 has been modified to conform to the current year presentation. Within net cash provided by operating activities, other current and other non-current assets have been combined. In addition, amortization of cloud computing arrangement implementation costs is presented separately. Previously, this amount was included in other non-cash items, net. Within net cash used by financing activities, employee taxes paid for shares withheld is included in other. Previously, this amount was presented separately. The consolidated statements of shareholders' equity for the quarter and nine months ended September 30, 2023 have also been modified to conform to the current year presentation. Common shares retired are included in common shares issued, net of tax withholding. Previously, these amounts were presented separately.


NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS

ASU No. 2023-07 – In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on the related disclosures within our consolidated financial statements.

ASU No. 2023-09 – In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which modifies the required income tax disclosures to include specific categories in the income tax rate reconciliation and to require the disclosure of income tax payments by jurisdiction, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The standard is required to be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on the related disclosures within our consolidated financial statements.



7
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

NOTE 3: SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION

Trade accounts receivable – Net trade accounts receivable was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Trade accounts receivable – gross$183,466 $197,546 
Allowance for credit losses(11,206)(6,541)
Trade accounts receivable – net(1)
$172,260 $191,005 

(1) Includes unbilled receivables of $61,416 as of September 30, 2024 and $43,673 as of December 31, 2023.

Changes in the allowance for credit losses for the nine months ended September 30, 2024 and 2023 were as follows:
Nine Months Ended
September 30,
(in thousands)20242023
Balance, beginning of year$6,541 $4,182 
Bad debt expense12,040 5,191 
Write-offs and other(7,375)(2,774)
Balance, end of period$11,206 $6,599 

Inventories and supplies – Inventories and supplies were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Finished and semi-finished goods$34,425 $34,194 
Raw materials and supplies17,230 17,339 
Reserve for excess and obsolete items(12,053)(9,445)
Inventories and supplies, net of reserve$39,602 $42,088 

Available-for-sale debt securities – We did not hold any available-for-sale debt securities as of September 30, 2024. Available-for-sale debt securities held as of December 31, 2023 were comprised of the following:

 December 31, 2023
(in thousands)CostGross unrealized gainsGross unrealized lossesFair value
Cash equivalents:
Domestic money market fund$22,000 $— $— $22,000 
Available-for-sale debt securities$22,000 $— $— $22,000 
 
The domestic money market fund held highly liquid, short-term investments managed by the financial institution. Further information regarding the fair value of available-for-sale debt securities can be found in Note 8.

Revenue in excess of billings – Revenue in excess of billings was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Conditional right to receive consideration$15,745 $20,680 
Unconditional right to receive consideration(1)
14,178 5,427 
Revenue in excess of billings$29,923 $26,107 

(1) Represents revenues that are earned but not currently billable under the related contract terms.

8
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)


Intangibles – Intangibles were comprised of the following:
 September 30, 2024December 31, 2023
(in thousands)Gross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Internal-use software$596,355 $(453,331)$143,024 $554,825 $(412,364)$142,461 
Customer lists/relationships345,208 (247,963)97,245 363,298 (235,557)127,741 
Partner relationships75,396 (17,660)57,736 74,911 (14,031)60,880 
Technology-based intangibles65,700 (27,783)37,917 97,633 (54,251)43,382 
Trade names39,367 (38,716)651 39,367 (23,792)15,575 
Software to be sold6,200 (4,960)1,240 36,900 (35,195)1,705 
Intangibles$1,128,226 $(790,413)$337,813 $1,166,934 $(775,190)$391,744 

Amortization of intangibles was $38,626 for the quarter ended September 30, 2024, $34,941 for the quarter ended September 30, 2023, $111,690 for the nine months ended September 30, 2024 and $110,017 for the nine months ended September 30, 2023. During the second quarter of 2024, we modified the useful life of a trade name asset that we no longer expect to utilize beyond 2024. This change resulted in incremental amortization expense of $6,674 during the quarter ended September 30, 2024 and $13,349 during the nine months ended September 30, 2024. The amount expected to be recognized during the fourth quarter of 2024 is not material.

Based on the intangibles in service as of September 30, 2024, estimated future amortization expense is as follows:
(in thousands)Estimated
amortization
expense
Remainder of 2024$32,230 
2025101,851 
202672,200 
202743,530 
202827,115 

In the normal course of business, we acquire and develop internal-use software. We also, at times, purchase customer list and partner relationship assets. During the nine months ended September 30, 2024, we acquired or developed $56,163 of internal-use software with a weighted-average useful life of 3 years. Other intangibles acquired during the period were not material.

Goodwill – In conjunction with the realignment of our reportable business segments effective January 1, 2024 (Note 15), the goodwill amounts by reportable segment as of December 31, 2023 have been recast to reflect our new segment structure. No goodwill impairment charges were recorded in conjunction with the segment realignment. Changes in goodwill by reportable segment and in total were as follows for the nine months ended September 30, 2024:
(in thousands)Merchant ServicesB2B Payments
Data Solutions(1)
Print(1)
All Other(1)
Total
Balance, December 31, 2023
$727,688 $160,431 $40,804 $493,924 $7,743 $1,430,590 
Asset impairment charge (Note 6)— — — — (6,700)(6,700)
Currency translation adjustment— — — (29)— (29)
Balance, September 30, 2024
$727,688 $160,431 $40,804 $493,895 $1,043 $1,423,861 

(1) The Data Solutions and Print balances are net of accumulated impairment charges of $145,584 and $193,699, respectively, for each period. All Other is net of accumulated impairment charges of $6,700 as of September 30, 2024.


9
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Other non-current assets – Other non-current assets were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Postretirement benefit plan asset$101,211 $94,939 
Cloud computing arrangement implementation costs44,409 59,234 
Prepaid product discounts(1)
35,834 40,376 
Deferred contract acquisition costs(2)
17,995 21,103 
Loans and notes receivable from distributors, net of allowance for credit losses(3)
11,635 12,443 
Other23,909 23,087 
Other non-current assets$234,993 $251,182 

(1) Amortization of prepaid product discounts was $24,844 for the nine months ended September 30, 2024 and $25,291 for the nine months ended September 30, 2023.
(2) Amortization of deferred contract acquisition costs was $9,445 for the nine months ended September 30, 2024 and $8,088 for the nine months ended September 30, 2023.

(3) Amount includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,678 as of September 30, 2024 and $987 as of December 31, 2023.

Changes in the allowance for credit losses related to loans and notes receivable from distributors were as follows for the nine months ended September 30, 2024 and 2023:
Nine Months Ended
September 30,
(in thousands)20242023
Balance, beginning of year$928 $1,024 
Bad debt expense (benefit)184 (46)
Balance, end of period$1,112 $978 

Past due receivables and those on non-accrual status were not material as of September 30, 2024 or December 31, 2023.

We categorize loans and notes receivable into risk categories based on information about the ability of borrowers to service their debt, including current financial information, historical payment experience, current economic trends and other factors. The highest quality receivables are assigned a 1-2 internal grade. Those that have a potential weakness requiring management's attention are assigned a 3-4 internal grade.

The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of September 30, 2024. There were no write-offs or recoveries recorded during the nine months ended September 30, 2024.

Loans and notes receivable from distributors amortized cost basis by origination year
(in thousands)2024202320202019PriorTotal
Risk rating:
1-2 internal grade$943 $328 $895 $324 $11,223 $13,713 
3-4 internal grade— — — — 712 712 
Loans and notes receivable$943 $328 $895 $324 $11,935 $14,425 

10
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)


Accrued liabilities – Accrued liabilities were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Employee bonuses, including sales incentives$32,308 $49,446 
Deferred revenue(1)
22,885 35,343 
Interest15,063 10,481 
Operating lease liabilities12,674 13,562 
Income taxes12,659 7,558 
Customer rebates11,313 12,718 
Wages and payroll liabilities, including vacation11,269 8,605 
Restructuring2,936 9,689 
Prepaid product discounts1,775 4,477 
Other29,149 39,548 
Accrued liabilities$152,031 $191,427 
 
(1) Revenue recognized for amounts included in deferred revenue at the beginning of the period was $30,707 for the nine months ended September 30, 2024 and $37,972 for the nine months ended September 30, 2023.

Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows:
(in thousands)September 30,
2024		September 30,
2023
Cash and cash equivalents$41,307 $42,189 
Restricted cash and restricted cash equivalents included in funds held for customers41,258 143,893 
Non-current restricted cash included in other non-current assets3,030 2,907 
Total cash, cash equivalents, restricted cash and restricted cash equivalents$85,595 $188,989 



11
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

NOTE 4: EARNINGS (LOSS) PER SHARE

The following table reflects the calculation of basic and diluted earnings (loss) per share. During each period, certain share-based awards, as noted below, were excluded from the calculation of diluted earnings (loss) per share because their effect would have been antidilutive.
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2024202320242023
Earnings (loss) per share – basic:  
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe8,931 (7,983)40,193 11,144 
Income allocated to participating securities(3)(9)(15)(29)
Income (loss) attributable to Deluxe available to common shareholders$8,928 $(7,992)$40,178 $11,115 
Weighted-average shares outstanding44,250 43,663 44,106 43,498 
Earnings (loss) per share – basic$0.20 $(0.18)$0.91 $0.26 
Earnings (loss) per share – diluted:
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe8,931 (7,983)40,193 11,144 
Income allocated to participating securities(3)(9)(12)(29)
Re-measurement of share-based awards classified as liabilities
(7)— (45)— 
Income (loss) attributable to Deluxe available to common shareholders$8,921 $(7,992)$40,136 $11,115 
Weighted-average shares outstanding44,250 43,663 44,106 43,498 
Dilutive impact of potential common shares556 — 550 273 
Weighted-average shares and potential common shares outstanding
44,806 43,663 44,656 43,771 
Earnings (loss) per share – diluted$0.20 $(0.18)$0.90 $0.25 
Antidilutive potential common shares excluded from calculation1,205 1,450 1,205 1,450 



12
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

NOTE 5: OTHER COMPREHENSIVE INCOME (LOSS)

Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income (loss) was as follows:
Accumulated other comprehensive loss componentsAmounts reclassified from accumulated other comprehensive lossAffected line item in consolidated statements of comprehensive income (loss)
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Amortization of postretirement benefit plan items:
Prior service credit$355 $355 $1,066 $1,066 Other income
Net actuarial loss(334)(568)(1,001)(1,705)Other income
Total amortization21 (213)65 (639)Other income
Tax (expense) benefit(44)17 (133)49 Income tax (provision) benefit
Amortization of postretirement benefit plan items, net of tax(23)(196)(68)(590)Net income (loss)
Realized gain on cash flow hedges
830 984 2,640 2,191 Interest expense
Tax expense
(223)(264)(712)(588)Income tax (provision) benefit
Realized gain on cash flow hedges, net of tax
607 720 1,928 1,603 Net income (loss)
Currency translation adjustment(1)
— — — (863)Gain (loss) on sale of businesses and long-lived assets
Total reclassifications, net of tax$584 $524 $1,860 $150 

(1) Relates to the sale of our North American web hosting business during the quarter ended June 30, 2023 (Note 6).

Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss for the nine months ended September 30, 2024 and 2023 were as follows:
(in thousands)Postretirement benefit plans
Net unrealized loss on cash flow hedges(1)
Currency translation adjustmentAccumulated other comprehensive loss
Balance, December 31, 2023
$(19,824)$(286)$(9,918)$(30,028)
Other comprehensive loss before reclassifications
— (1,013)(951)(1,964)
Amounts reclassified from accumulated other comprehensive loss
68 (1,928)— (1,860)
Net current-period other comprehensive income (loss)
68 (2,941)(951)(3,824)
Balance, September 30, 2024
$(19,756)$(3,227)$(10,869)$(33,852)

(1) Other comprehensive loss before reclassifications is net of an income tax benefit of $375.


13
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

(in thousands)Postretirement benefit plans
Net unrealized loss on debt securities(1)
Net unrealized gain on cash flow hedges(2)
Currency translation adjustmentAccumulated other comprehensive loss
Balance, December 31, 2022
$(26,872)$(909)$2,593 $(12,076)$(37,264)
Other comprehensive (loss) income before reclassifications
— (183)8,487 460 8,764 
Amounts reclassified from accumulated other comprehensive loss
590 — (1,603)863 (150)
Net current-period other comprehensive income (loss)
590 (183)6,884 1,323 8,614 
Balance, September 30, 2023
$(26,282)$(1,092)$9,477 $(10,753)$(28,650)

(1) Other comprehensive loss before reclassifications is net of an income tax benefit of $63.

(2) Other comprehensive income before reclassifications is net of income tax expense of $3,114.


NOTE 6: DIVESTITURES

In September and December 2023, we executed agreements allowing for the conversion of our U.S. and Canadian payroll and human resources services customers to other service providers. We recognized related income of $5,208 during the quarter ended September 30, 2024 and $28,190 during the nine months ended September 30, 2024, and we received related cash proceeds of $18,321 during the nine months ended September 30, 2024. The income recognized is included in gain (loss) on sale of businesses and long-lived assets on the consolidated statements of comprehensive income (loss). Recognition of the remaining income will be based on actual customer conversion and retention activity, which we expect to be completed during the fourth quarter of 2024. These businesses generated annual revenue of approximately $27,000 during 2023. During the quarter ended September 30, 2024, we recognized a related pretax goodwill impairment charge of $6,700, as we determined that the remaining cash flows expected to be generated by these businesses no longer supported the carrying value of the related reporting unit as of September 30, 2024. Subsequent to the impairment charge, the remaining goodwill balance for this reporting unit was $1,043. In conjunction with our phased transition out of these businesses, we expect that this goodwill will be fully impaired during the fourth quarter of 2024. During the nine months ended September 30, 2024, we also recognized a gain of $1,000 on the sale of a small business distributor customer list.

In June 2023, we completed the sale of our North American web hosting and logo design businesses for net cash proceeds of $31,230. During the quarter ended September 30, 2023, we recorded an out-of-period correcting adjustment that decreased the gain recognized on this sale by $4,457. This adjustment was not material to the period or any other historical interim or annual period. During the nine months ended September 30, 2023, we recognized a pretax gain of $17,486 on this sale. These businesses generated revenue of approximately $28,000 during 2023, through the sale date. Further information regarding this sale can be found under the caption "Note 6: Acquisition and Divestitures" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.


14
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

NOTE 7: DERIVATIVE FINANCIAL INSTRUMENTS

As part of our interest rate risk management strategy, we have entered into interest rate swaps, which we designated as cash flow hedges, to mitigate variability in interest payments on a portion of our variable-rate debt (Note 12). Our derivative instruments were comprised of the following:

September 30,
2024		December 31,
2023
(in thousands)Notional amount
Interest rate(1)
MaturityBalance sheet locationFair value
asset / (liability)		Fair value
asset / (liability)
June 2023 amortizing interest rate swap:
$222,932 4.249 %June 2026Other non-current liabilities$(3,500)$(2,158)
March 2023
interest rate swap:
200,000 4.003 %March 2026Other non-current liabilities and other non-current assets(807)287 
September 2022 interest rate swap:
300,000 3.990 %September 2025Accrued liabilities and other non-current assets(73)1,519 

(1) In addition, an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, is paid on amounts outstanding under our credit facility (Note 12).

Changes in the fair values of the interest rate swaps are recorded in accumulated other comprehensive loss on the consolidated balance sheets and are subsequently reclassified to interest expense as interest payments are made on the variable-rate debt. The fair values of the derivatives are calculated based on the applicable reference rate curve on the date of measurement. The cash flow hedges were fully effective as of September 30, 2024 and December 31, 2023, and their impact on consolidated net income and the consolidated statements of cash flows was not material. We also expect that the amount that will be reclassified to interest expense during the next 12 months will not be material.



15
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

NOTE 8: FAIR VALUE MEASUREMENTS

Goodwill impairment analyses – Our policy regarding goodwill impairment can be found under the caption "Note 1: Significant Accounting Policies" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K. This policy explains our methodology for assessing the impairment of goodwill.

In completing the 2024 annual impairment analysis as of July 31, 2024, we elected to perform quantitative analyses for certain of our reporting units: Merchant Services, Treasury Management and Business Essentials. These quantitative analyses indicated that the estimated fair values of the reporting units exceeded their carrying values. In determining the estimated fair values of our reporting units, we are required to estimate a number of factors, including revenue growth rates; earnings before interest, taxes, depreciation and amortization ("EBITDA") margins; terminal growth rates; discount rates; and the allocation of shared and corporate items. These assumptions require significant judgement. Actual results may differ from our assumptions and may result in future impairment charges.

We elected to complete qualitative analyses for our remaining reporting units with goodwill. These qualitative analyses evaluated factors, including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the most recent quantitative analyses completed in prior periods. In completing these qualitative assessments, we noted no changes in events or circumstances that indicated it was more likely than not that the fair value of any reporting unit was less than its carrying amount. As such, no goodwill impairment charges were recorded as a result of our 2024 annual impairment analysis.

As of September 30, 2024, we also completed a quantitative analysis of the goodwill related to our U.S. and Canadian payroll and human resources services business, which we are currently in the process of exiting. This analysis resulted in a pretax goodwill impairment charge of $6,700 during the quarter ended September 30, 2024. Further information can be found in Note 6.

Recurring fair value measurements – Cash and cash equivalents included available-for-sale debt securities at December 31, 2023 (Note 3), which consisted of a domestic money market fund. The cost of the fund, which was traded in an active market, approximated its fair value because of the short-term nature of the underlying investments. The fair value of derivative instruments (Note 7) is calculated based on the applicable reference rate curve on the date of measurement.


16
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Information regarding the fair values of our financial instruments was as follows:

 Fair value measurements using
September 30, 2024Quoted prices in active markets for identical assets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
(in thousands)Balance sheet locationCarrying valueFair value
Measured at fair value through comprehensive income:
Derivative liabilities (Note 7)Accrued liabilities and other non-current liabilities$(4,380)$(4,380)$— $(4,380)$— 
Amortized cost:
CashCash and cash equivalents41,307 41,307 41,307 — — 
CashFunds held for customers41,258 41,258 41,258 — — 
CashOther non-current assets3,030 3,030 3,030 — — 
Loans and notes receivable from distributors
Other current assets and other non-current assets13,314 14,278 — — 14,278 
Long-term debtCurrent portion of long-term debt and long-term debt1,531,527 1,515,895 — 1,515,895 — 

17
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

 Fair value measurements using
December 31, 2023Quoted prices in active markets for identical assets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
(in thousands)Balance sheet locationCarrying valueFair value
Measured at fair value through comprehensive income:
Available-for-sale debt securities
Cash and cash equivalents$22,000 $22,000 $22,000 $— $— 
Derivative assets (Note 7)Other non-current assets1,806 1,806 — 1,806 — 
Derivative liability (Note 7)Other non-current liabilities(2,158)(2,158)— (2,158)— 
Amortized cost:
CashCash and cash equivalents49,962 49,962 49,962 — — 
Cash
Funds held for customers383,134 383,134 383,134 — — 
Cash
Other non-current assets2,937 2,937 2,937 — — 
Loans and notes receivable from distributors
Other current assets and other non-current assets13,430 13,249 — — 13,249 
Long-term debt
Current portion of long-term debt and long-term debt1,592,851 1,554,028 — 1,554,028 — 


NOTE 9: RESTRUCTURING AND INTEGRATION EXPENSE

Restructuring and integration expense consists of costs related to initiatives to drive earnings and cash flow growth and also includes costs related to the consolidation and migration of certain applications and processes. These costs consist primarily of consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as costs related to facility closures and consolidations. In addition, we have recorded employee severance costs across functional areas. Restructuring and integration expense is not allocated to our reportable business segments.

We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of these initiatives is to further drive shareholder value by (1) expanding our EBITDA growth trajectory, (2) increasing cash flow, (3) paying down debt, and (4) improving our leverage ratio. Our various initiatives include a balanced mix of structural cost reductions focused on organizational structure, processes and operational improvements, in addition to workstreams to drive revenue growth. As part of these initiatives, we have already combined like-for-like capabilities, reduced management layers and consolidated core operations to run more efficiently and to create the ability to invest in high impact talent to accelerate our growth businesses of payments and data. The associated expense, which consisted primarily of consulting and severance costs, was approximately $11,000 during the quarter ended September 30, 2024 and $20,000 during the quarter ended September 30, 2023. For the nine months ended September 30, 2024 and September 30, 2023, the associated expense was approximately $33,000 and $35,000, respectively. To date, we have incurred expense of approximately $80,000, and we anticipate that we will incur additional North Star restructuring and integration expense of approximately $30,000 through 2025.


18
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Restructuring and integration expense is reflected on the consolidated statements of comprehensive income (loss) as follows:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Total cost of revenue$234 $6,429 $1,132 $10,868 
Operating expenses11,031 22,935 35,899 60,067 
Restructuring and integration expense$11,265 $29,364 $37,031 $70,935 

Restructuring and integration expense for each period was comprised of the following:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
External consulting and other costs$8,614 $10,939 $25,733 $31,561 
Employee severance benefits902 11,179 2,459 17,526 
Internal labor381 2,469 1,602 6,341 
Other1,368 4,777 7,237 15,507 
Restructuring and integration expense$11,265 $29,364 $37,031 $70,935 

Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets and represent expected cash payments required to satisfy the remaining severance obligations to those employees already terminated and those expected to be terminated under our various initiatives. The majority of the employee reductions, as well as the related severance payments, are expected to be completed by mid-2025.

Changes in our restructuring and integration accruals were as follows:
(in thousands)Employee severance benefits
Balance, December 31, 2023
$9,689 
Charges2,961 
Reversals(502)
Payments(9,212)
Balance, September 30, 2024
$2,936 

The charges and reversals presented in the rollforward of our restructuring and integration accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued liabilities on the consolidated balance sheets.


NOTE 10: INCOME TAX PROVISION

Our effective income tax rate was 33.6% for the quarter ended September 30, 2024 and 33.7% for the nine months ended September 30, 2024, compared to an effective income tax rate of 34.1% for the year ended December 31, 2023. While there was a larger tax rate benefit from business exit activity in 2023 than in 2024, the 2024 tax rate benefited from lower tax impacts for share-based compensation, foreign operations and tax return to provision adjustments. For comparison, the reconciliation of our effective income tax rate for 2023 to the U.S. federal statutory tax rate can be found under the caption "Note 10: Income Tax Provision" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Our effective income tax rate for the quarter ended September 30, 2023 was 13.0%. This tax rate was driven by the pretax loss for the period, the impact of discrete items related to our business exit activity, and an increase in our state effective income tax rate during the quarter.


19
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Our effective income tax rate for the nine months ended September 30, 2023 was 45.0%. This tax rate was driven by the lower pretax income for the period, combined with tax expense related to share-based compensation and our foreign operations, including the repatriation of foreign earnings.


NOTE 11: POSTRETIREMENT BENEFITS

We have historically provided certain health care benefits for eligible retired U.S. employees. In addition to our retiree health care plan, we also have a U.S. supplemental executive retirement plan. Further information regarding our postretirement benefit plans can be found under the caption “Note 12: Postretirement Benefits” in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Postretirement benefit income is included in other income, net on the consolidated statements of comprehensive income (loss) and consisted of the following components:
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Interest cost$435 $496 $1,306 $1,489 
Expected return on plan assets(2,099)(1,830)(6,296)(5,490)
Amortization of prior service credit(355)(355)(1,066)(1,066)
Amortization of net actuarial losses334 568 1,001 1,705 
Net periodic benefit income$(1,685)$(1,121)$(5,055)$(3,362)

NOTE 12: DEBT

Debt outstanding was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Senior, secured term loan facility$790,563 $877,187 
Senior, unsecured notes475,000 475,000 
Amounts drawn on senior, secured revolving credit facility209,000 252,000 
Securitization obligations65,776 — 
Total principal amount1,540,339 1,604,187 
Less: unamortized discount and debt issuance costs(8,812)(11,336)
Total debt, net of discount and debt issuance costs1,531,527 1,592,851 
Less: current portion of long-term debt, net of debt issuance costs(71,914)(86,153)
Long-term debt$1,459,613 $1,506,698 

Maturities of long-term debt were as follows as of September 30, 2024:
(in thousands)Debt obligations
2025$101,063 
2026898,500 
202765,776 
2028— 
2029475,000 
Total principal amount$1,540,339 


20
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Credit facility – In June 2021, we executed a senior, secured credit facility consisting of a revolving credit facility with commitments of $500,000 and a $1,155,000 term loan facility. The revolving credit facility includes a $40,000 swingline sub-facility and a $25,000 letter of credit sub-facility. Loans under the revolving credit facility may be borrowed, repaid and re-borrowed until June 1, 2026, at which time all amounts borrowed must be repaid. The term loan facility is required to be repaid in equal quarterly installments of $21,656 through June 30, 2025 and $28,875 from September 30, 2025 through March 31, 2026. The remaining balance is due on June 1, 2026. The term loan facility also includes mandatory prepayment requirements related to asset sales, new debt (other than permitted debt) and excess cash flow, subject to certain limitations. No premium or penalty is payable in connection with any mandatory or voluntary prepayment of the term loan facility.

Interest is payable on the credit facility at a fluctuating rate of interest determined by reference to the Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, as defined in the credit agreement, and a commitment fee is payable on the unused portion of the revolving credit facility. Amounts outstanding under the credit facility had a weighted-average interest rate of 6.60% as of September 30, 2024 and 6.83% as of December 31, 2023, including the impact of interest rate swaps that effectively convert a portion of our variable-rate debt to fixed-rate debt. Further information regarding the interest rate swaps can be found in Note 7.

Borrowings under the credit facility are collateralized by substantially all of the present and future tangible and intangible personal property held by us and our subsidiaries that have guaranteed our obligations under the credit facility, subject to certain exceptions. The credit agreement contains customary covenants regarding limits on levels of indebtedness, liens, mergers, certain asset dispositions, changes in business, advances, investments, loans and restricted payments. The covenants are subject to a number of limitations and exceptions set forth in the credit agreement.

The credit agreement also includes requirements regarding our consolidated total leverage ratio and our consolidated secured leverage ratio, as defined in the credit agreement. During each remaining quarterly period, the consolidated total leverage ratio may not equal or exceed 4.25 to 1.00 and the consolidated secured leverage ratio may not equal or exceed 3.50 to 1.00. In addition, we must maintain a minimum interest coverage ratio of at least 3.00 to 1.00 throughout the remaining term of the credit facility. Failure to meet any of the above requirements would result in an event of default that would allow lenders to declare amounts outstanding immediately due and payable and would allow the lenders to enforce their interests against collateral pledged if we are unable to settle the amounts outstanding. We were in compliance with all debt covenants as of September 30, 2024.

The credit agreement contains customary representations and warranties and, as a condition to borrowing, requires that all such representations and warranties be true and correct in all material respects on the date of each borrowing, including representations as to no material adverse change in our business, assets, operations or financial condition. If our consolidated total leverage ratio exceeds 2.75 to 1.00, the aggregate annual amount of permitted dividends and share repurchases in connection with incentive-based equity and compensation is limited to $60,000.

As of September 30, 2024, amounts available for borrowing under our revolving credit facility were as follows:
(in thousands)Available borrowings
Revolving credit facility commitment$500,000 
Amounts drawn on revolving credit facility(209,000)
Outstanding letters of credit(1)
(7,673)
Net available for borrowing as of September 30, 2024
$283,327 

(1) We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our revolving credit facility.

Senior, unsecured notes – In June 2021, we issued $500,000 of 8.0% senior unsecured notes that mature in June 2029. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. Proceeds from the offering, net of discount and offering costs, were $490,741, resulting in an effective interest rate of 8.3%. The net proceeds from the notes were used to fund the acquisition of First American Payment Systems, L.P. in June 2021. Interest payments are due each June and December. During 2022, we settled $25,000 of these notes via open market purchases.

The indenture governing the notes contains covenants that limit our ability and the ability of our restricted subsidiaries to, among other things, incur additional indebtedness and liens, issue redeemable stock and preferred stock, pay dividends and distributions, make loans and investments, and consolidate or merge or sell all or substantially all of our assets.

Securitization facility – In March 2024, Deluxe Receivables LLC, a wholly-owned subsidiary, entered into a receivables financing agreement (the “Securitization Facility”) with a group of financial institutions. The agreement terminates in March 2027, unless extended in accordance with its terms. The maximum amount available under the Securitization Facility is $80,000,

21
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

subject to certain borrowing base adjustments. Under the agreement, we sold and will continue to automatically sell certain of our accounts receivable to the subsidiary as collateral for borrowings under the facility. Borrowings bear interest at SOFR plus an applicable margin, and a commitment fee is payable on the unused portion of the facility. Interest and fees are due monthly. As of September 30, 2024, $65,776 was outstanding under the facility at an interest rate of 6.64%. We utilized the proceeds from these borrowings to prepay amounts due under our secured term loan facility.

The Securitization Facility is accounted for as a collateralized financing activity, rather than the sale of assets. As such, the subsidiary is consolidated, and the receivable balances pledged as collateral are presented as accounts receivable on the consolidated balance sheet, and the borrowings are presented as long-term debt. Cash receipts related to the underlying receivables are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within the consolidated statement of cash flows.


NOTE 13: OTHER COMMITMENTS AND CONTINGENCIES

Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnification provisions generally encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of the terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal matters related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, we do not believe that any liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. We have recorded liabilities for known indemnifications related to environmental matters. These liabilities were not material as of September 30, 2024 or December 31, 2023.

Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits for active employees and those employees on long-term disability. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported, and totaled $9,047 as of September 30, 2024 and $9,024 as of December 31, 2023. These accruals are included in accrued liabilities and other non-current liabilities on the consolidated balance sheets. Our workers' compensation liability is recorded at present value. The difference between the discounted and undiscounted liability was not material as of September 30, 2024 or December 31, 2023.

Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends.

Litigation – Recorded liabilities for legal matters, as well as related charges recorded in each period, were not material to our financial position, results of operations or cash flows during the periods presented, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or cash flows, upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or cash flows in the period in which the ruling occurs or in future periods.


NOTE 14: SHAREHOLDERS' EQUITY

In October 2018, our board of directors authorized the repurchase of up to $500,000 of our common stock. This authorization has no expiration date. No shares were repurchased under this authorization during the nine months ended September 30, 2024 or September 30, 2023, and $287,452 remained available for repurchase as of September 30, 2024.



22
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

NOTE 15: BUSINESS SEGMENT INFORMATION

Effective January 1, 2024, we revised our reportable business segments to align with structural and management reporting changes that better reflect our portfolio mix and offerings. We now operate the following reportable segments, generally organized by product and service type:

•Merchant Services – provides electronic credit and debit card authorization and payment systems and processing services, primarily to small and medium-sized retail and service businesses.

•B2B Payments – provides treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management, as well as fraud and security services and Deluxe Payment Exchange+, an accounts payable automation solution.

•Data Solutions – provides data-driven marketing solutions, including digital engagement, financial institution profitability reporting and account switching tools, and business incorporation services.

•Print – provides printed personal and business checks, printed business forms, business accessories and promotional products.

The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2023 Form 10-K. We allocate corporate costs for our shared services functions to our business segments when the costs are directly attributable to a segment. This includes certain sales and marketing, supply chain, real estate, finance, information technology and legal costs. Costs that are not directly attributable to a business segment are reported as Corporate operations and consist primarily of marketing, accounting, information technology, human resources, facilities, executive management, and legal, tax and treasury costs that support the corporate function.

All of our segments operate primarily in the U.S., with some operations in Canada. Through June 2023, we operated our former web hosting business in portions of Europe and through partners in Central and South America. Revenue and long-lived assets related to our foreign operations were not material to our consolidated financial statements during the periods covered by this report. No single customer accounted for more than 10% of consolidated revenue during the nine months ended September 30, 2024 and 2023.

Our chief operating decision maker ("CODM") is our Chief Executive Officer. He reviews EBITDA on an adjusted basis for each segment when deciding how to allocate resources and to assess segment operating performance. Adjusted EBITDA for each segment excludes depreciation and amortization expense, interest expense, income tax expense and certain other amounts, which may include, from time to time: asset impairment charges; restructuring and integration expense; share-based compensation expense; acquisition transaction costs; certain legal-related expenses outside of the normal course of business; and gains or losses on sales of businesses and long-lived assets. The CODM does not review segment asset information when making investment or operating decisions regarding our reportable business segments.


23
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

The following is our segment information for the quarters and nine months ended September 30, 2024 and 2023. The segment information for 2023 has been recast to reflect our current segment structure.

Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Merchant Services:
Revenue$93,531 $87,984 $288,536 $268,556 
Adjusted EBITDA17,752 17,393 58,377 53,120 
B2B Payments:
Revenue75,140 74,581 214,788 226,118 
Adjusted EBITDA15,264 16,074 42,537 44,741 
Data Solutions:
Revenue61,065 64,080 178,169 167,735 
Adjusted EBITDA17,485 15,317 48,150 38,956 
Print:
Revenue297,313 304,282 909,393 942,839 
Adjusted EBITDA97,407 98,044 282,226 298,015 
Total reportable segments:
Revenue$527,049 $530,927 $1,590,886 $1,605,248 
Adjusted EBITDA147,908 146,828 431,290 434,832 
All other:(1)
Revenue1,395 6,917 10,329 49,648 
Adjusted EBITDA448 4,130 5,672 22,170 
Total:
Revenue$528,444 $537,844 $1,601,215 $1,654,896 
Adjusted EBITDA148,356 150,958 436,962 457,002 

(1) Includes our North American web hosting and logo design businesses, which were sold in June 2023, and our payroll and human resources services business, which we are in the process of exiting (Note 6).

The following table presents the reconciliation of total segment adjusted EBITDA to consolidated income (loss) before income taxes:
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Total segment adjusted EBITDA$148,356 $150,958 $436,962 $457,002 
Corporate operations(43,454)(49,068)(128,217)(146,304)
Depreciation and amortization expense(44,277)(38,857)(127,716)(124,985)
Interest expense(29,905)(32,034)(90,910)(93,982)
Net income attributable to non-controlling interest38 26 103 80 
Asset impairment charge(6,700)— (6,700)— 
Restructuring and integration expense(11,265)(29,364)(37,031)(70,935)
Share-based compensation expense(4,842)(4,539)(14,972)(15,889)
Certain legal-related benefit (expense)350 (1,949)50 (2,195)
Gain (loss) on sale of businesses and long-lived assets5,208 (4,324)29,190 17,618 
Income (loss) before income taxes$13,509 $(9,151)$60,759 $20,410 


24
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

The following tables present revenue disaggregated by our product and service offerings:
Quarter Ended September 30, 2024
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $176,827 $— $176,827 
Merchant services93,531 — — — — 93,531 
Promotional solutions— — — 61,264 — 61,264 
Forms and other business products— — — 59,222 — 59,222 
Treasury management solutions
— 58,574 — — — 58,574 
Data-driven marketing— — 56,520 — — 56,520 
Other— 16,566 4,545 — 1,395 22,506 
Total revenue$93,531 $75,140 $61,065 $297,313 $1,395 $528,444 
Quarter Ended September 30, 2023
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
other		Consolidated
Checks$— $— $— $179,990 $— $179,990 
Merchant services87,984 — — — — 87,984 
Promotional solutions— — — 62,309 — 62,309 
Forms and other business products— — — 61,983 — 61,983 
Treasury management solutions
— 59,224 — — — 59,224 
Data-driven marketing— — 59,561 — — 59,561 
Other— 15,357 4,519 — 6,917 26,793 
Total revenue$87,984 $74,581 $64,080 $304,282 $6,917 $537,844 
Nine Months Ended September 30, 2024
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $534,672 $— $534,672 
Merchant services288,536 — — — — 288,536 
Promotional solutions— — — 193,343 — 193,343 
Forms and other business products— — — 181,378 — 181,378 
Treasury management solutions
— 169,000 — — — 169,000 
Data-driven marketing— — 163,339 — — 163,339 
Other— 45,788 14,830 — 10,329 70,947 
Total revenue$288,536 $214,788 $178,169 $909,393 $10,329 $1,601,215 

25
DELUXE CORPORATION
CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)

Nine Months Ended September 30, 2023
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $545,061 $— $545,061 
Merchant services268,556 — — — — 268,556 
Promotional solutions— — — 203,542 1,456 204,998 
Forms and other business products— — — 194,236 — 194,236 
Treasury management solutions— 180,864 — — — 180,864 
Data-driven marketing— — 153,346 — — 153,346 
Other— 45,254 14,389 — 48,192 107,835 
Total revenue$268,556 $226,118 $167,735 $942,839 $49,648 $1,654,896 


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") includes the following sections:

•Executive Overview that discusses what we do, our operating results at a high level and our financial outlook for the year;
•Consolidated Results of Operations, Restructuring and Integration Expense, and Segment Results that includes a more detailed discussion of our revenue and expenses;
•Cash Flows and Liquidity and Capital Resources that discusses key aspects of our cash flows, financial commitments, capital structure and financial position; and
•Critical Accounting Estimates that discusses the estimates that involve a significant level of uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.

Please note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties, including, but not limited to, our 2024 outlook, market impacts, and expectations regarding our strategy and performance. Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K") outlines known material risks and important information to consider when evaluating our forward-looking statements and is incorporated into this Item 2 of this report on Form 10-Q as if fully stated herein. The Private Securities Litigation Reform Act of 1995 (the "Reform Act") provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information. When we use the words or phrases “should result,” “believe,” “intend,” “plan,” “are expected to,” “targeted,” “will continue,” “will approximate,” “is anticipated,” “estimate,” “project,” “outlook,” "forecast" or similar expressions in this Quarterly Report on Form 10-Q, in future filings with the Securities and Exchange Commission, in our press releases, investor presentations and in oral statements made by our representatives, they indicate forward-looking statements within the meaning of the Reform Act.

This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). In addition, we discuss free cash flow, net debt, liquidity, adjusted diluted earnings per share ("EPS"), consolidated adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") and consolidated adjusted EBITDA margin, all of which are non-GAAP financial measures. We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide useful information to assist investors in analyzing our current period operating performance and in assessing our future operating performance. For this reason, our internal management reporting also includes these financial measures, which should be considered in addition to, and not as superior to or as a substitute for, GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and therefore, may not result in useful comparisons. The reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in Consolidated Results of Operations.


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EXECUTIVE OVERVIEW

We help businesses deepen customer relationships through trusted, technology-enabled solutions that help businesses pay and get paid, accelerate growth and operate more efficiently. Our solutions include merchant services, marketing services and data analytics, treasury management solutions, and promotional products, as well as customized checks and business forms. We support millions of small businesses, thousands of financial institutions and hundreds of the world’s largest consumer brands. Our reach, scale and distribution channels position us to be a trusted business partner for our customers.

Our Strategy

A detailed discussion of our strategy can be found in Part I, Item 1 of the 2023 Form 10-K. Having substantially completed our infrastructure modernization initiatives, we have shifted our focus to growth investments, primarily in our payments and data businesses, so that we can continue to drive scale, with the goal of growing profits faster than revenue. Our operations continue to benefit from our disciplined pricing actions and overall cost management. During the third quarter of 2023, we announced our North Star program, the goal of which is to further drive shareholder value by (1) expanding our EBITDA growth trajectory, (2) driving increased cash flow, (3) paying down debt, and (4) improving our leverage ratio. We have started to see the benefits of our North Star initiatives, with both adjusted EBITDA and adjusted EBITDA margin for the first nine months of the year improving over 2023, excluding the impact of business exits. In addition, free cash flow increased $30 million for the first nine months of 2024, as compared to the first nine months of 2023, and net debt as of September 30, 2024 decreased $31 million from the prior year end. Further information can be found in Restructuring and Integration Expense.

Realignment – Effective January 1, 2024, we realigned our organizational structure to better reflect our portfolio mix and offerings, and we updated our reportable segments to correspond with these changes. We did not operate under the new segment structure during 2023. Information regarding our realigned reportable segments for the third quarter and first nine months of 2024 and 2023 can be found under the caption "Note 15: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report.

Business exits – In June 2023, we completed the sale of our North American web hosting and logo design businesses. These businesses generated annual revenue of approximately $28 million during 2023, through the sale date. In September and December of 2023, we executed agreements allowing for the conversion of our U.S. and Canadian payroll and human resources services customers to other service providers. These businesses generated annual revenue of approximately $27 million during 2023. Further information regarding these business exits can be found under the caption "Note 6: Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report and under the caption "Note 6: Acquisition and Divestitures" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K. We believe that these business exits allow us to focus our resources on the key growth areas of payments and data, while allowing us to optimize our operations.

2024 Financial Results

2024 earnings vs. 2023 – Multiple factors drove the increase in net income for the first nine months of 2024, as compared to the first nine months of 2023, including:

•price increases in response to the inflationary environment, primarily in the Print and Merchant Services segments;

•a $34 million decrease in restructuring and integration expense;

•the benefit of actions taken to optimize our cost structure, including workforce adjustments, marketing refinement and real estate rationalization;

•an increase of $12 million in gains on the sale of businesses and long-lived assets: and

•revenue growth in the Data Solutions and Merchant Services segments.

Partially offsetting these increases in net income were the following factors:

•the continuing secular decline in checks, business forms and some business accessories;

•the elimination of the earnings generated by exited businesses, as well as a related $7 million pretax goodwill impairment charge;

•inflationary pressures on hourly wages, materials and delivery; and


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•an increase in bad debt expense of $7 million, primarily related to certain specific accounts receivable reserve adjustments in the Print segment.

Diluted EPS of $0.90 for the first nine months of 2024, as compared to $0.25 for the first nine months of 2023, reflects the increase in net income as described in the preceding paragraphs, partially offset by higher shares outstanding in 2024. Adjusted diluted EPS for the first nine months of 2024 was $2.46 compared to $2.53 for the first nine months of 2023, and excludes the impact of non-cash items or items that we believe are not indicative of our current period operating performance. The decrease in adjusted diluted EPS was driven by the continuing secular decline in checks, business forms and some business accessories, as well as the impact of business exits, which we estimate reduced adjusted diluted EPS by approximately $0.24 year over year, inflationary pressures on our cost structure, and increased bad debt expense. These decreases in adjusted diluted EPS were partially offset by price increases in response to the inflationary environment, the benefit of various cost optimization actions across functional areas, and revenue growth in the Data Solutions and Merchant Services segments. A reconciliation of diluted EPS to adjusted diluted EPS can be found in Consolidated Results of Operations.

Cash flows and liquidity – Net cash provided by operating activities increased $19 million for the first nine months of 2024, as compared to the first nine months of 2023, driven, in large part, by our pricing and cost management initiatives and a reduction in restructuring costs in 2024. In addition, payments for cloud computing implementation costs decreased $6 million related to costs incurred in 2023 for the implementation of our enterprise resource planning ("ERP") system, and performance-based compensation payments decreased $5 million compared to the prior year. Partially offsetting these increases in operating cash flow was the continuing secular decline in checks, business forms and some business accessories, as well as the impact of our business exits and inflationary pressures on our cost structure. In addition, payments for income taxes increased $4 million related primarily to foreign tax payments. Free cash flow increased $30 million for the first nine months of 2024, as compared to the first nine months of 2023. Total debt was $1.53 billion and net debt was $1.49 billion as of September 30, 2024. We held cash and cash equivalents of $41 million as of September 30, 2024, and liquidity was $325 million. Our capital allocation priorities are to reduce our debt and net leverage, deliver high return internal investments and pay our dividend. We continue to responsibly invest the free cash flow generated by our Print business into our growth businesses. A reconciliation of free cash flow, net debt and liquidity to the comparable GAAP financial measures can be found in Consolidated Results of Operations.

Recent market conditions – We continually monitor the interest rate environment and its impact on our outstanding debt. As of September 30, 2024, we held interest rate swaps that effectively convert $723 million of our variable-rate debt to a fixed rate. As a result, 78% of our debt had a weighted-average fixed rate of 7.0% as of September 30, 2024, which partially insulates us from future interest rate increases.

We continue to monitor inflationary pressures on our labor, delivery and material costs. In response to the inflationary environment, we implemented targeted price increases, primarily in our Print and Merchant Services segments. Despite the price changes, we continue to experience healthy revenue volumes, demonstrating the strength of our business and continued demand for our products. We have, at times, experienced some supply disruptions impacting certain printed products in our Print segment. We continuously monitor our supply chain to avoid delays or disruptions. We have also experienced labor supply issues in portions of our business. It remains difficult to estimate the severity and duration of inflation or supply chain and labor issues on our business, financial position or results of operations.

We also monitor trends in small business sentiment and consumer discretionary spending. We review many data sources, including information from the credit card brands, the Federal Reserve and other economic forecast providers, as well as our own proprietary data. These trends impact multiple areas of our portfolio, most notably our Merchant Services and Print segments. Our year-to-date performance reflected the generally stable economic environment. While consumers remain under pressure in some areas, we believe downward trends in discretionary consumer spending have largely stabilized. At the same time, we have seen demand soften for some of our discretionary promotional products in the Print segment. These data points are reflected in our 2024 revenue outlook.

Outlook for 2024

We expect that revenue for 2024 will be between $2.12 billion and $2.14 billion, compared to 2023 revenue of $2.19 billion, which included revenue of approximately $56 million from our business exits. We expect that adjusted EBITDA for the full year will be between $405 million and $415 million, compared to $417 million for 2023, which included adjusted EBITDA of approximately $26 million from our business exits. We expect that adjusted diluted EPS for 2024 will be between $3.20 and $3.35, compared to $3.32 for 2023, which included approximately $0.30 from our business exits, and we expect that free cash flow for the full year will be between $90 million and $100 million, compared to $98 million for 2023. Our outlook ranges exclude the payroll and human resources services business that we are currently in the process of exiting. These estimates are subject to, among other things, prevailing macroeconomic conditions, global unrest, labor supply issues, inflation and the impact of business exits. Information regarding our outlook information can be found in Reconciliation of Non-GAAP Financial Measures within the Consolidated Results of Operations section.


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As of September 30, 2024, we held cash and cash equivalents of $41 million and $283 million was available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be approximately $100 million for the full year, as compared to $101 million for 2023, as we continue with important innovation investments and building scale across our product categories. We also expect that we will continue to pay our regular quarterly dividend. However, dividends are approved by our board of directors each quarter and thus, are subject to change. We anticipate that net cash generated by operations, along with cash and cash equivalents on hand and availability under our credit facility, will be sufficient to support our operations, including our contractual obligations and debt service requirements, for the next 12 months, as well as our long-term capital requirements. We were in compliance with our debt covenants as of September 30, 2024, and we anticipate that we will remain in compliance with our debt covenants throughout the next 12 months.


CONSOLIDATED RESULTS OF OPERATIONS

Consolidated Revenue
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Total revenue$528,444 $537,844 (1.7%)$1,601,215 $1,654,896 (3.2%)

The decreases in total revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven, in part, by the business exits discussed in Executive Overview, which resulted in a decrease in revenue of approximately $6 million for the third quarter of 2024 and $39 million for the first nine months of 2024. Also contributing to the decrease in revenue was the continuing secular decline in order volumes for checks, business forms and some business accessories, as well as a decrease in treasury management revenue due to reduced lockbox processing volumes and the transition from our dependency on one-time, non-recurring revenue to a recurring revenue model. Partially offsetting these decreases in revenue were price increases in response to the inflationary environment, primarily in the Print and Merchant Services segments, as well as revenue growth in the Merchant Services segment driven by both volume and new customers. In addition, for the first nine months of 2024, strong demand for our data-driven marketing services drove a $10 million increase in revenue.

We do not manage our business based on product versus service revenue. Instead, we analyze our revenue based on the product and service offerings shown under the caption "Note 15: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

Our revenue mix by business segment was as follows:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Merchant Services17.7 %16.4 %18.0 %16.2 %
B2B Payments14.2 %13.8 %13.4 %13.7 %
Data Solutions11.5 %11.9 %11.1 %10.1 %
Print56.3 %56.6 %56.8 %57.0 %
All other0.3 %1.3 %0.7 %3.0 %
Total revenue100.0 %100.0 %100.0 %100.0 %

Consolidated Cost of Revenue
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Total cost of revenue$246,577 $255,127 (3.4%)$747,020 $775,737 (3.7%)
Total cost of revenue as a percentage of total revenue
46.7 %47.4 %(0.7) pts.46.7 %46.9 %(0.2) pts.


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Cost of revenue consists primarily of raw materials used to manufacture our products, shipping and handling costs, third-party costs for outsourced products and services, payroll and related expenses, information technology costs, depreciation and amortization of assets used in the production process and in support of digital service offerings, and related overhead.

The decreases in total cost of revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven by reduced revenue volume from the continuing secular decline in checks, business forms and some business accessories, as well as the benefit of our various cost optimization initiatives and the decrease in treasury management revenue. In addition, restructuring and integration expense included in cost of revenue decreased $6 million for the third quarter of 2024 and $10 million for the first nine months of 2024, and total cost of revenue decreased approximately $2 million for the third quarter of 2024 and $15 million for the first nine months of 2024 due to the business exits discussed under Executive Overview. Partially offsetting these decreases in cost of revenue was the revenue growth in Merchant Services and inflationary pressure on hourly wages, materials and delivery. In addition, for the first nine months of 2024, strong demand for our data-driven marketing services drove an increase in cost of revenue, and we recorded additional amortization expense of $3 million related to the acceleration of amortization on the assets of our payroll and human resources services business, which we are currently in the process of exiting.

Total cost of revenue as a percentage of total revenue for the third quarter and first nine months of 2024 decreased as compared to the same periods in 2023, as the benefits of our pricing and cost optimization actions, the lower restructuring and integration expense and changes in campaign timing and client mix in Data Solutions more than offset the inflationary impacts and the accelerated amortization expense associated with our business exits.

Consolidated Selling, General & Administrative ("SG&A") Expense
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
SG&A expense$227,764 $233,891 (2.6%)$695,677 $726,880 (4.3%)
SG&A expense as a percentage of total revenue
43.1 %43.5 %(0.4) pts.43.4 %43.9 %(0.5) pts.

The decreases in SG&A expense for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven, in large part, by our various cost management actions, including workforce adjustments, marketing optimization and real estate rationalization, as well as a decrease related to the business exits discussed under Executive Overview of approximately $1 million for the third quarter of 2024 and $10 million for the first nine months of 2024. For the first nine months of 2024, these decreases in SG&A expense were partially offset by a $7 million increase in bad debt expense, primarily related to certain specific accounts receivable reserve adjustments in the Print segment.

Restructuring and Integration Expense
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Restructuring and integration expense$11,031 $22,935 $(11,904)$35,899 $60,067 $(24,168)

We continue to pursue several initiatives designed to focus our business behind our growth strategy and to increase our efficiency. The amount of restructuring and integration expense is expected to vary from period to period as we execute these initiatives. Further information regarding these costs can be found in Restructuring and Integration Expense in this MD&A discussion.

Asset Impairment Charge
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Asset impairment charge$6,700 $— $6,700 $6,700 $— $6,700 

During the quarter ended September 30, 2024, we recorded a goodwill impairment charge related to the exit from our U.S. and Canadian payroll and human resources services business. Further information can be found under the caption "Note 6: Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report.


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Gain (Loss) on Sale of Businesses and Long-Lived Assets

 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Gain (loss) on sale of businesses and long-lived assets$5,208 $(4,324)$9,532 $29,190 $17,618 $11,572 

As discussed in Executive Overview, we are currently in the process of exiting our payroll and human resources services business, and we recognized income of $5 million during the third quarter of 2024 and $28 million during the first nine months of 2024 related to customer conversion agreements executed in 2023. In June 2023, we completed the sale of our North American web hosting and logo design businesses. Further information regarding these business exits can be found under the caption "Note 6: Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report.

Interest Expense
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Interest expense$29,905 $32,034 (6.6%)$90,910 $93,982 (3.3%)
Weighted-average debt outstanding1,572,201 1,682,442 (6.6%)1,588,327 1,691,137 (6.1%)
Weighted-average interest rate7.1 %7.1 %— 7.1 %7.0 %0.1 pts.

The decreases in interest expense for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were primarily due to the decrease in average debt outstanding. For the first nine months of 2024, this decrease was partially offset by the impact of higher interest rates. Based on the amount of variable-rate debt outstanding as of September 30, 2024, a one percentage point change in the weighted-average interest rate would result in a change in interest expense of approximately $1 million for the remainder of 2024.

Income Tax Provision (Benefit)
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Income tax provision (benefit)$4,540 $(1,194)480.2%$20,463 $9,186 122.8%
Effective income tax rate33.6 %13.0 %20.6 pts.33.7 %45.0 %(11.3) pts.

The change in our effective income tax rate for the third quarter of 2024, as compared to the third quarter of 2023, was driven primarily by the pretax loss for the third quarter of 2023, as well as discrete items related to our business exit activity in each period.

The effective income tax rate decreased for the first nine months of 2024, as compared to the first nine months of 2023, as the higher tax rate benefit from business exit activity in 2023 was more than offset by lower tax rate impacts in 2024 from share-based compensation and the repatriation of foreign earnings.

Net Income (Loss) / Diluted Earnings (Loss) Per Share
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands, except per share amounts)20242023Change20242023Change
Net income (loss)$8,969 $(7,957)212.7%$40,296 $11,224 259.0%
Diluted earnings (loss) per share0.20 (0.18)211.1%0.90 0.25 260.0%
Adjusted diluted EPS(1)
0.84 0.79 6.3%2.46 2.53 (2.8%)

(1) Information regarding the calculation of adjusted diluted EPS can be found in the following section entitled Reconciliation of Non-GAAP Financial Measures.

Multiple factors drove the increase in net income for the third quarter of 2024, as compared to the third quarter of 2023, including:

•pricing and cost optimization actions;

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•an $18 million reduction in restructuring and integration expense;

•an increase of $10 million in gains on the sale of businesses and long-lived assets:

•revenue growth in Merchant Services; and

•a $2 million reduction in interest expense.

Partially offsetting these increases in net income were the following factors:

•the continuing secular decline in checks, business forms and some business accessories;

•the elimination of the earnings generated by exited businesses, as well as a related $7 million pretax goodwill impairment charge; and

•inflationary pressures on hourly wages, materials and delivery.

Diluted EPS of $0.20 for the third quarter of 2024, as compared to a loss of $0.18 for the third quarter of 2023, reflects the increase in net income as described in the preceding paragraphs, partially offset by higher shares outstanding in 2024. The increase in adjusted diluted EPS for the third quarter of 2024, as compared to the third quarter of 2023, was driven by our pricing and cost optimization actions, revenue growth in Merchant Services and lower interest expense. Partially offsetting these increases in adjusted diluted EPS was the continuing secular decline in checks, business forms and some business accessories, as well as the impact of business exits and inflationary pressures on our cost structure.

The increases in net income and diluted EPS and the decrease in adjusted diluted EPS for the first nine months of 2024, as compared to the first nine months of 2023, were driven by the factors outlined in Executive Overview - 2024 earnings vs. 2023.

Adjusted EBITDA
Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Adjusted EBITDA(1)
$104,902 $101,890 3.0%$308,745 $310,698 (0.6%)
Adjusted EBITDA as a percentage of total revenue (adjusted EBITDA margin)(1)
19.9 %18.9 %1.0 pts.19.3 %18.8 %0.5 pts.

(1) Information regarding the calculation of adjusted EBITDA and adjusted EBITDA margin can be found in the following section entitled Reconciliation of Non-GAAP Financial Measures.

The increase in adjusted EBITDA for the third quarter of 2024, as compared to the third quarter of 2023, was due to the benefits of our pricing and cost optimization actions and revenue growth in Merchant Services. Partially offsetting these increases in adjusted EBITDA was the continuing secular decline in checks, business forms and some business accessories; a $4 million decline driven by the business exits discussed under Executive Overview; and inflationary pressures on hourly wages, materials and delivery.

The decrease in adjusted EBITDA for the first nine months of 2024, as compared to the first nine months of 2023, was driven by the continuing secular decline in checks, business forms and some business accessories; a $16 million decline driven by the business exits discussed under Executive Overview; inflationary pressures on hourly wages, materials and delivery; and an increase in bad debt expense of $7 million, primarily related to certain specific accounts receivable reserve adjustments in the Print segment. Partially offsetting these decreases in adjusted EBITDA were the benefits of our pricing and cost optimization actions and revenue growth in Data Solutions and Merchant Services.

Adjusted EBITDA margin increased for the third quarter and first nine months of 2024, as compared to the same periods in 2023, as pricing and cost optimization actions more than offset the inflationary pressures. For the first nine months of 2024, adjusted EBITDA margin was also negatively impacted by the increase in bad debt expense.

Reconciliation of Non-GAAP Financial Measures

Free cash flow – We define free cash flow as net cash provided by operating activities less purchases of capital assets. We believe that free cash flow is an important indicator of cash available for debt service and for shareholders, after making

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capital investments to maintain or expand our asset base. A limitation of using the free cash flow measure is that not all of our free cash flow is available for discretionary spending, as we may have mandatory debt payments and other cash requirements that must be deducted from our available cash. We believe that the measure of free cash flow provides an additional metric to compare cash generated by operations on a consistent basis and to provide insight into the cash flow available to fund items such as dividends, mandatory and discretionary debt reduction, acquisitions or other strategic investments, and share repurchases.

Net cash provided by operating activities reconciles to free cash flow as follows:
 Nine Months Ended
September 30,
(in thousands)20242023
Net cash provided by operating activities$134,122 $114,906 
Purchases of capital assets(69,777)(80,809)
Free cash flow$64,345 $34,097 

Net debt – Management believes that net debt is an important measure to monitor leverage and to evaluate the balance sheet. In calculating net debt, cash and cash equivalents are subtracted from total debt because they could be used to reduce our debt obligations. A limitation associated with using net debt is that it subtracts cash and cash equivalents, and therefore, may imply that management intends to use cash and cash equivalents to reduce outstanding debt. In addition, net debt suggests that our debt obligations are less than the most comparable GAAP measure indicates.

Total debt reconciles to net debt as follows:
(in thousands)September 30,
2024		December 31,
2023
Total debt$1,531,527 $1,592,851 
Cash and cash equivalents(41,307)(71,962)
Net debt$1,490,220 $1,520,889 

Liquidity – We define liquidity as cash and cash equivalents plus the amount available for borrowing under our revolving credit facility. We consider liquidity to be an important metric for demonstrating the amount of cash that is available or that could be available on short notice. This financial measure is not a substitute for GAAP liquidity measures. Instead, we believe that this measurement enhances investors' understanding of the funds that are currently available.

Liquidity was as follows:
(in thousands)September 30,
2024		December 31,
2023
Cash and cash equivalents$41,307 $71,962 
Amount available for borrowing under revolving credit facility283,327 240,514 
Liquidity$324,634 $312,476 

Adjusted diluted EPS – By excluding the impact of non-cash items or items that we believe are not indicative of current period operating performance, we believe that adjusted diluted EPS provides useful comparable information to assist in analyzing our current period operating performance and in assessing our future operating performance. As such, adjusted diluted EPS is one of the key financial performance metrics we use to assess the operating results and performance of the business and to identify strategies to improve performance. It is reasonable to expect that one or more of the excluded items will occur in future periods, but the amounts recognized may vary significantly.



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Diluted EPS reconciles to adjusted diluted EPS as follows:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2024202320242023
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe8,931 (7,983)40,193 11,144 
Acquisition amortization13,475 16,514 42,251 58,811 
Accelerated amortization6,851 — 16,740 — 
Restructuring and integration expense11,265 29,364 37,031 70,935 
Share-based compensation expense4,842 4,539 14,972 15,889 
Certain legal-related (benefit) expense(350)1,949 (50)2,195 
Asset impairment charge6,700 — 6,700 — 
(Gain) loss on sale of businesses and long-lived assets(5,208)4,324 (29,190)(17,618)
Adjustments, pretax37,575 56,690 88,454 130,212 
Income tax provision impact of pretax adjustments(1)
(9,001)(13,773)(18,845)(30,669)
Adjustments, net of tax28,574 42,917 69,609 99,543 
Adjusted net income attributable to Deluxe37,505 34,934 109,802 110,687 
Income allocated to participating securities(8)— (8)— 
Re-measurement of share-based awards classified as liabilities
(8)— (47)(20)
Adjusted income attributable to Deluxe available to common shareholders
$37,489 $34,934 $109,747 $110,667 
Weighted average shares and potential common shares outstanding44,806 43,663 44,656 43,771 
Adjustment(2)
— 378 11 50 
Adjusted weighted average shares and potential common shares outstanding44,806 44,041 44,667 43,821 
GAAP diluted EPS$0.20 $(0.18)$0.90 $0.25 
Adjustments, net of tax0.64 0.97 1.56 2.28 
Adjusted diluted EPS$0.84 $0.79 $2.46 $2.53 

(1) The tax effect of the pretax adjustments considers the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact that approximates the U.S. effective tax rate for each adjustment. However, the tax impact of certain adjustments, such as share-based compensation expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable effective tax rate(s) in those jurisdictions.

(2) The total of weighted-average shares and potential common shares outstanding used in the calculation of adjusted diluted EPS differs from the GAAP calculation due to differences in the amount of dilutive securities in each calculation.

Adjusted EBITDA and adjusted EBITDA margin – We believe that adjusted EBITDA and adjusted EBITDA margin are useful in evaluating our operating performance, as they eliminate the effect of interest expense, income taxes, the accounting effects of capital investments (i.e., depreciation and amortization) and certain items, as presented below, that may vary for reasons unrelated to current period operating performance. In addition, management utilizes these measures to assess the operating results and performance of the business, to perform analytical comparisons and to identify strategies to improve performance. We also believe that an increasing adjusted EBITDA and adjusted EBITDA margin depict an increase in the value of the company. We do not consider adjusted EBITDA to be a measure of cash flow, as it does not consider certain cash requirements such as interest, income taxes, debt service payments or capital investments.


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Net income (loss) reconciles to adjusted EBITDA and adjusted EBITDA margin as follows:
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Depreciation and amortization expense44,277 38,857 127,716 124,985 
Interest expense29,905 32,034 90,910 93,982 
Income tax provision (benefit)4,540 (1,194)20,463 9,186 
Restructuring and integration expense11,265 29,364 37,031 70,935 
Share-based compensation expense4,842 4,539 14,972 15,889 
Certain legal-related (benefit) expense(350)1,949 (50)2,195 
Asset impairment charge6,700 — 6,700 — 
(Gain) loss on sale of businesses and long-lived assets(5,208)4,324 (29,190)(17,618)
Adjusted EBITDA$104,902 $101,890 $308,745 $310,698 
Adjusted EBITDA margin19.9 %18.9 %19.3 %18.8 %

2024 outlook – Our outlook information for 2024 excludes the operations of the payroll and human resources services business that we are currently in the process of exiting. Because the revenue from this business will gradually decrease as customers elect to convert to other service providers, we are unable to estimate the results of operations for this business for 2024. In addition, we do not reconcile our adjusted EBITDA, adjusted diluted EPS or free cash flow outlook to the directly comparable GAAP financial measures because we do not provide outlook guidance for the reconciling items between net income, adjusted net income and adjusted EBITDA, and certain of these reconciling items impact cash flows from operating activities. Because of the substantial uncertainty and variability surrounding certain of the forward-looking reconciling items, including asset impairment charges, restructuring and integration expense, gains and losses on sales of businesses and long-lived assets, and certain legal-related expenses, a reconciliation of the non-GAAP financial measure outlook guidance to the corresponding GAAP measure is not available without unreasonable effort. The probable significance of certain of these reconciling items is high and, based on historical experience, could be material.

Reconciliations to the comparable GAAP financial measures for adjusted EBITDA, adjusted diluted EPS and free cash flow for the year ended December 31, 2023 can be found in the MD&A section of the 2023 Form 10-K, under the caption entitled Reconciliation of Non-GAAP Financial Measures within the Consolidated Results of Operations section.


RESTRUCTURING AND INTEGRATION EXPENSE

Restructuring and integration expense consists of costs related to initiatives to drive earnings and cash flow growth and also includes costs related to the consolidation and migration of certain applications and processes. These costs consist primarily of consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as costs related to facility closures and consolidations. In addition, we have recorded employee severance costs across functional areas.

We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of these initiatives is to further drive shareholder value by (1) expanding our EBITDA growth trajectory, (2) increasing cash flow, (3) paying down debt, and (4) improving our leverage ratio. The various initiatives include a balanced mix of structural cost reductions focused on organizational structure, processes and operational improvements, in addition to workstreams to drive revenue growth. As part of these initiatives, we have already combined like-for-like capabilities, reduced management layers and consolidated core operations to run more efficiently and to create the ability to invest in high impact talent to accelerate our growth businesses of payments and data. We have made meaningful progress on all of the remaining North Star initiatives, and we expect we will continue to see the benefits in our results of operations for the remainder of the year and throughout 2025. For example, during the second quarter of 2024, we began the consolidation into one unified brand of all six brands acquired in 2021 as part of the First American acquisition. We expect that this will improve our marketing effectiveness and lower our costs over time. We have also made significant progress in reducing our corporate expenses, which decreased 12% for the first nine months of 2024, as compared to the first nine months of 2023. Further information regarding our restructuring and integration expense, including

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expenses related to our North Star program, can be found under the caption "Note 9: Restructuring and Integration Expense" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

We expect that the benefits of the various North Star initiatives will continue to ramp up over the coming quarters. The overall program targets a $100 million run-rate improvement in free cash flow and an $80 million run-rate improvement in adjusted EBITDA by 2026. Through September 30, 2024, we have incurred related restructuring and integration expense of approximately $80 million, and we anticipate that we will incur additional North Star restructuring and integration expense of approximately $30 million through 2025. These charges will include professional services fees, employee severance and other restructuring-related charges.

The majority of the employee reductions included in our restructuring and integration accruals as of September 30, 2024, as well as the related severance payments, are expected to be completed by mid-2025. As a result of these employee reductions, including those related to our North Star program, we expect to realize annual cost savings of approximately $10 million in cost of sales and $25 million in SG&A expense in 2024, in comparison to our 2023 results of operations. In addition, we anticipate cost savings from facility closures of approximately $3 million in 2024, in comparison to our 2023 results of operations. Note that these savings may be offset by increased labor and other costs, including inflationary impacts and investments in the business.


SEGMENT RESULTS

Effective January 1, 2024, we realigned our organizational structure to better reflect our portfolio mix and offerings, and we updated our reportable segments to correspond with these changes. We did not operate under the new segment structure during 2023. Information regarding our realigned reportable segments can be found under the caption "Note 15: Business Segment Information" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part 1, Item 1 of this report, where information regarding revenue from our various product and service offerings can also be found.

Merchant Services

Results for our Merchant Services segment were as follows:
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Total revenue$93,531 $87,984 6.3%$288,536 $268,556 7.4%
Adjusted EBITDA17,752 17,393 2.1%58,377 53,120 9.9%
Adjusted EBITDA margin19.0 %19.8 %(0.8 pts.)20.2 %19.8 %0.4 pts.

The increases in total revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven by customer wins spanning our market channels, including our bank partner relationships and increasing penetration with integrated software vendors, or ISVs. In addition, revenue also benefited from favorable volume, most notably in our government channel, as well as pricing actions in the second quarter of 2024 in response to the inflationary environment. For the full year, we continue to anticipate mid to high single-digit revenue growth, even though the year-over-year comparison in the fourth quarter of 2024 will be negatively impacted by a large customer conversion that we completed in the fourth quarter of 2023.

The increases in adjusted EBITDA for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven primarily by the revenue growth and price increases. Adjusted EBITDA margin decreased for the third quarter of 2024, as compared to the third quarter of 2023, driven by year-over-year changes in customer and market channel mix, partially offset by the pricing actions. Adjusted EBITDA margin increased for the first nine months of 2024, as compared to the first nine months of 2023, driven by the scalability of this business and the pricing actions. For the full year, we expect adjusted EBITDA margin to remain in the low 20% range.


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B2B Payments

Results for our B2B Payments segment were as follows:
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Total revenue$75,140 $74,581 0.7%$214,788 $226,118 (5.0%)
Adjusted EBITDA15,264 16,074 (5.0%)42,537 44,741 (4.9%)
Adjusted EBITDA margin20.3 %21.6 %(1.3) pts.19.8 %19.8 %—

Total revenue increased slightly for the third quarter of 2024, as compared to the third quarter of 2023, driven primarily by the implementation of new remittance processing customers and the benefit of a modest price increase implemented in response to the inflationary environment. Partially offsetting these increases in revenue were non-recurring hardware and other sales during 2023. We are in the midst of a transition from our dependency on one-time, non-recurring revenue to a recurring revenue model. As such, we are deliberately reducing focus on selling lower-margin products such as check imaging devices and one-time software licenses.

Total revenue decreased for the first nine months of 2024, as compared to the first nine months of 2023, driven primarily by reduced lockbox processing volumes and the reduction in non-recurring revenue streams. We currently have a number of new remittance processing customers in the implementation phase. Partially offsetting these decreases in revenue was the benefit of a modest price increase implemented in response to the inflationary environment and new client implementations in the third quarter of 2024. For the full year, we anticipate that revenue will decline in the low single-digit percentage range as we continue to transition to recurring revenue.

Adjusted EBITDA decreased for the third quarter of 2024, as compared to the third quarter of 2023, driven by impacts from the initial onboarding of new remittance processing customers during the quarter and the non-recurring business in 2023. These reductions in adjusted EBITDA were partially offset by the modest price increase. Adjusted EBITDA decreased for the first nine months of 2024, as compared to the first nine months of 2023, driven primarily by the revenue decline for the period, inflationary pressures on labor costs and costs related to the initial onboarding of new remittance processing customers during the third quarter of 2024. Partially offsetting these decreases in adjusted EBITDA was the benefit of cost optimization initiatives, including the consolidation of our lockbox processing operations, as well as the modest price increase. We expect that adjusted EBITDA margins for this business will be in the low to mid-20% range as we complete the on-boarding of new customers over the next several quarters and our cost structure stabilizes.

Data Solutions

Results for our Data Solutions segment were as follows:
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Total revenue$61,065 $64,080 (4.7%)$178,169 $167,735 6.2%
Adjusted EBITDA17,485 15,317 14.2%48,150 38,956 23.6%
Adjusted EBITDA margin28.6 %23.9 %4.7 pts.27.0 %23.2 %3.8 pts.

The decrease in total revenue for the third quarter of 2024, as compared to the third quarter of 2023, was driven primarily by data-driven marketing campaign timing dynamics during each period. This business experiences some quarter-to-quarter volatility driven by the timing of our customers' marketing campaigns.

The increase in total revenue for the first nine months of 2024, as compared to the first nine months of 2023, was driven primarily by strong demand for customer acquisition marketing activities across both our base of core financial institution partners, as well as our growing portfolio of other clients. New campaign activity remains strong, and we anticipate that our mid- to high single-digit longer term growth outlook remains appropriate from a full year perspective.

Adjusted EBITDA for the third quarter and first nine months of 2024 increased compared to the same periods in 2023, driven primarily by changes in campaign timing and client mix and our cost optimization actions. For the first nine months of 2024, adjusted EBITDA also benefited from the increase in data-driven marketing volume. Adjusted EBITDA margin increased for the third quarter and first nine months of 2024, as compared to the same periods in 2023, driven primarily by changes in client mix and cost optimization actions. We anticipate that adjusted EBITDA margin will continue to be in the low to mid-20% range going forward.

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Print

Results for our Print segment were as follows:
 Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)20242023Change20242023Change
Total revenue$297,313 $304,282 (2.3%)$909,393 $942,839 (3.5%)
Adjusted EBITDA97,407 98,044 (0.6%)282,226 298,015 (5.3%)
Adjusted EBITDA margin32.8 %32.2 %0.6 pts.31.0 %31.6 %(0.6) pts.

The decreases in total revenue for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven primarily by the continuing secular decline in order volumes for checks, business forms and some business accessories, as well as some demand softness for our promotional products. These decreases in revenue were partially offset by pricing actions in response to the inflationary environment. For the full year, we expect that the percentage revenue decline will be in the low to mid-single digits.

The decreases in adjusted EBITDA for the third quarter and first nine months of 2024, as compared to the same periods in 2023, were driven by the secular decline in order volumes, reduced volume for our promotional products, and inflationary pressures on delivery and materials. In addition, for the nine month period, adjusted EBITDA was impacted by increased bad debt expense, primarily related to certain specific accounts receivable reserve adjustments. These decreases in adjusted EBITDA were partially offset by pricing actions in response to the inflationary environment, as well as the benefit of various cost optimization initiatives. We remain focused on operating expense discipline and overall efficiency in this segment.

Adjusted EBITDA margin increased for the third quarter of 2024, as compared to the third quarter of 2023, driven by the pricing actions and the benefit of our cost optimization strategies as we continue to drive supply chain efficiency and capacity utilization, while leveraging our print-on-demand investments. Adjusted EBITDA margin decreased for the first nine months of 2024, as compared to the first nine months of 2023, as the impact of inflationary cost pressures, the lower order volumes and the increased bad debt expense more than offset the benefit of pricing and cost optimization actions. For the full year, we continue to expect adjusted EBITDA margin in the low 30% range.


CASH FLOWS AND LIQUIDITY

As of September 30, 2024, we held cash and cash equivalents of $41 million and restricted cash and restricted cash equivalents included in funds held for customers and other non-current assets of $44 million. The following table shows our cash flow activity for the nine months ended September 30, 2024 and 2023 and should be read in conjunction with the consolidated statements of cash flows appearing in Part I, Item 1 of this report.
 Nine Months Ended September 30,
(in thousands)20242023Change
Net cash provided by operating activities$134,122 $114,906 $19,216 
Net cash used by investing activities(51,323)(50,735)(588)
Net cash used by financing activities(452,081)(213,590)(238,491)
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents
(3,156)993 (4,149)
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents
$(372,438)$(148,426)$(224,012)
Free cash flow(1)
$64,345 $34,097 $30,248 
(1) See Reconciliation of Non-GAAP Financial Measures within the Consolidated Results of Operations section, which defines and illustrates how we calculate free cash flow.


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Net cash provided by operating activities increased $19 million for the first nine months of 2024, as compared to the first nine months of 2023, driven, in large part, by our pricing and cost management initiatives and a reduction in restructuring costs in 2024. In addition, payments for cloud computing implementation costs decreased $6 million related to costs incurred in 2023 for the implementation of our ERP system, and performance-based compensation payments decreased $5 million compared to the prior year. Partially offsetting these increases in operating cash flow was the continuing secular decline in checks, business forms and some business accessories, as well as the impact of our business exits and inflationary pressures on our cost structure. In addition, payments for income taxes increased $4 million related primarily to foreign tax payments.

Included in net cash provided by operating activities were the following operating cash outflows:
 Nine Months Ended September 30,
(in thousands)20242023Change
Interest payments$82,778 $80,707 $2,071 
Performance-based compensation payments(1)
39,045 44,316 (5,271)
Income tax payments35,599 31,261 4,338 
Prepaid product discount payments22,945 21,798 1,147 
Severance payments9,212 11,448 (2,236)
Payments for cloud computing arrangement implementation costs475 6,944 (6,469)

(1) Amounts reflect compensation based on total company and segment performance.

Net cash used by investing activities for the first nine months of 2024 was $1 million higher than the first nine months of 2023, driven by lower proceeds from business exit activities in 2024, partially offset by an $11 million decrease in capital expenditures in 2024 and payments of $10 million in 2023 related to a joint venture focused on launching and marketing a business payment distribution technology platform.

Net cash used by financing activities for the first nine months of 2024 was $238 million higher than the first nine months of 2023, driven primarily by the net change in customer fund obligations in each period. In the first quarter of each year, we see a significant decrease in customer fund obligations driven by the seasonal nature of a portion of our Merchant Services segment. Property tax payments are collected in December and are paid on behalf of customers the following year. In addition, our customer fund obligations decreased due to our exit from the payroll business, as discussed under Executive Overview. Also contributing to the increase in net cash used by financing activities were higher payments on long-term debt during 2024, driven by the favorable operating cash flow and the use of cash on hand at December 31, 2023.

Significant investing and financing cash transactions for each period were as follows:
 Nine Months Ended September 30,
(in thousands)20242023Change
Net change in customer funds obligations$(338,955)$(150,936)$(188,019)
Purchases of capital assets(69,777)(80,809)11,032 
Net change in debt(64,511)(14,532)(49,979)
Cash dividends paid to shareholders(40,826)(40,140)(686)
Proceeds from sale of businesses and long-lived assets18,321 39,872 (21,551)

In assessing our cash needs, we must consider our debt service requirements, lease obligations, other contractual commitments and contingent liabilities. Information regarding the maturities of our long-term debt and our contingent liabilities can be found under the captions “Note 12: Debt” and "Note 13: Other Commitments and Contingencies," both of which appear in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report. Information regarding our lease obligations can be found under the caption "Note 14: Leases" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K, and information regarding our contractual obligations can be found in the MD&A section of the 2023 Form 10-K, under the section entitled Cash Flows and Liquidity.

As of September 30, 2024, $283 million was available for borrowing under our revolving credit facility. We anticipate that net cash generated by operations, along with cash and cash equivalents on hand and availability under our credit facility, will be sufficient to support our operations, including our contractual obligations and debt service requirements, for the next 12 months, as well as our long-term capital requirements. We anticipate that we will continue to pay our regular quarterly dividend. However, dividends are approved by our board of directors each quarter and thus, are subject to change.

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CAPITAL RESOURCES

The principal amount of our debt obligations was $1.54 billion as of September 30, 2024 and $1.60 billion as of December 31, 2023. Further information concerning our outstanding debt, including our debt service obligations, can be found under the caption “Note 12: Debt” in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

Our capital structure for each period was as follows:
 September 30, 2024December 31, 2023 
(in thousands)AmountWeighted-
average interest rate		AmountWeighted-
average interest rate		Change
Fixed interest rate(1)
$1,197,933 7.0 %$1,246,659 7.0 %$(48,726)
Floating interest rate342,406 7.2 %357,528 7.9 %(15,122)
Debt principal1,540,339 7.0 %1,604,187 7.2 %(63,848)
Shareholders’ equity612,685  604,616  8,069 
Total capital$2,153,024  $2,208,803  $(55,779)

(1) The fixed interest rate amount includes the amount of our variable-rate debt that is subject to interest rate swap agreements. The related interest rate includes the fixed rate under the swaps plus the credit facility spread due on all amounts outstanding under our credit facility.

In March 2024, we entered into an accounts receivable financing facility with a capacity of up to $80 million. As of September 30, 2024, $66 million was outstanding under the facility. We utilized the proceeds from these borrowings to prepay amounts due under our secured term loan facility. As such, we have no remaining payments due under the term loan facility in 2024. We were in compliance with our debt covenants as of September 30, 2024, and we anticipate that we will remain in compliance with our debt covenants throughout the next 12 months.

In October 2018, our board of directors authorized the repurchase of up to $500 million of our common stock. This authorization has no expiration date. We have not repurchased any shares under this authorization since the first quarter of 2020. As of September 30, 2024, $287 million remained available for repurchase under this authorization. Information regarding changes in shareholders' equity can be found in the consolidated statements of shareholders' equity appearing in Part I, Item 1 of this report.


CRITICAL ACCOUNTING ESTIMATES

A description of our critical accounting estimates was provided in the MD&A section of the 2023 Form 10-K. There were no changes in the determination of these estimates during the first nine months of 2024. Information regarding the goodwill impairment analyses completed during the third quarter of 2024 can be found under the caption "Note 8: Fair Value Measurements" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

New accounting pronouncements – Information regarding new accounting pronouncements yet to be adopted can be found under the caption “Note 2: New Accounting Pronouncements” in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk – We are exposed to changes in interest rates primarily as a result of the borrowing activities used to support our capital structure, maintain liquidity and fund business operations and investments. We do not enter into financial instruments for speculative or trading purposes. The nature and amount of debt outstanding can be expected to vary as a result of future business requirements, market conditions and other factors.

Interest is payable on amounts outstanding under our credit facility and under our accounts receivable financing arrangement at fluctuating rates of interest determined by reference to SOFR plus an applicable margin, as defined in the credit agreements. We also had $475 million of 8.0% senior, unsecured notes outstanding as of September 30, 2024. Including the related discount and debt issuance costs, the effective interest rate on these notes is 8.3%. Information regarding the maturities of our long-term debt can be found under the caption "Note 12: Debt" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report.

As of September 30, 2024, our total debt outstanding was as follows:
(in thousands)
Carrying amount(1)
Fair value(2)
Interest rate(3)
Senior, secured term loan facility$787,563 $790,563 6.6 %
Senior, unsecured notes469,188 450,556 8.0 %
Amounts drawn on revolving credit facility209,000 209,000 6.6 %
Securitization obligations65,776 65,776 6.6 %
Total debt$1,531,527 $1,515,895 7.0 %

(1) The carrying amount has been reduced by unamortized discount and debt issuance costs of $9 million.

(2) For the amounts outstanding under our credit facility agreement and our securitization obligations, fair value approximates carrying value because the interest rates are variable and reflect current market rates. The fair value of the senior, unsecured notes is based on quoted prices in active markets for the identical liability when traded as an asset.

(3) The interest rate presented for total debt includes the impact of the interest rate swaps discussed below.

As part of our interest rate risk management strategy, we entered into interest rate swaps, which we designated as cash flow hedges, to mitigate variability in interest payments on a portion of our variable-rate debt. As of September 30, 2024, the interest rate swaps effectively converted $723 million of variable-rate debt to a fixed rate. Further information regarding the interest rate swaps can be found under the caption "Note 7: Derivative Financial Instruments" in the Condensed Notes to Unaudited Consolidated Financial Statements appearing in Part I, Item 1 of this report. Changes in the fair values of the interest rate swaps are recorded in accumulated other comprehensive loss on the consolidated balance sheets and are subsequently reclassified to interest expense as interest payments are made on the variable-rate debt.

Based on the amount of variable-rate debt outstanding as of September 30, 2024, a one percentage point change in the weighted-average interest rate would result in a change in interest expense of approximately $1 million for the reminder of 2024.

Foreign currency exchange rate risk – We are exposed to changes in foreign currency exchange rates. Investments in, and loans and advances to, foreign subsidiaries and branches, as well as the operations of these businesses, are denominated in foreign currencies, primarily Canadian dollars. The effect of exchange rate changes is expected to have a minimal impact on our earnings and cash flows, as our foreign operations represent a relatively small portion of our business. We have not entered into hedges against changes in foreign currency exchange rates.


ITEM 4. CONTROLS AND PROCEDURES

(a)  Disclosure Controls and Procedures – As of the end of the period covered by this report, September 30, 2024 (the "Evaluation Date"), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in

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applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

(b) Internal Control Over Financial Reporting – There were no material changes in our internal control over financial reporting identified in connection with our evaluation during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We record accruals with respect to identified claims or lawsuits when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Claims and lawsuits are reviewed quarterly and provisions are taken or adjusted to reflect the status of a particular matter. We believe the recorded reserves in our consolidated financial statements are adequate in light of the probable and estimable outcomes. As of September 30, 2024, recorded liabilities were not material to our financial position, results of operations or cash flows, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or cash flows upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or cash flows in the period in which the ruling occurs or in future periods.


ITEM 1A. RISK FACTORS

Our risk factors are outlined in Part I, Item 1A of the 2023 Form 10-K. There have been no significant changes in these risk factors since we filed the 2023 Form 10-K.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In October 2018, our board of directors authorized the repurchase of up to $500 million of our common stock. This authorization has no expiration date. No shares were repurchased under this authorization during the third quarter of 2024 and $287 million remained available for repurchase as of September 30, 2024.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended), adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933).



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ITEM 6. EXHIBITS

Exhibit NumberDescription
31.1
31.2
32.1
101.INSXBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover page interactive data file (formatted as Inline XBRL and contained in Exhibit 101)


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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 DELUXE CORPORATION
            (Registrant)
  
Date: November 7, 2024/s/ Barry C. McCarthy
 Barry C. McCarthy
President and Chief Executive Officer
(Principal Executive Officer)
  
Date: November 7, 2024/s/ William C. Zint
 William C. Zint
Senior Vice President, Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)

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Exhibit 31.1


CEO CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Barry C. McCarthy, President and Chief Executive Officer of Deluxe Corporation, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Deluxe Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 
Date:  November 7, 2024/s/ Barry C. McCarthy
 Barry C. McCarthy
 President and Chief Executive Officer 



Exhibit 31.2


CFO CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William C. Zint, Chief Financial Officer of Deluxe Corporation, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Deluxe Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 7, 2024/s/ William C. Zint
 William C. Zint
 Senior Vice President, Chief Financial Officer




Exhibit 32.1


CEO AND CFO CERTIFICATION OF PERIODIC REPORT

We, Barry C. McCarthy, President and Chief Executive Officer of Deluxe Corporation (the “Company”), and William C. Zint, Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)the Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  November 7, 2024/s/ Barry C. McCarthy
 Barry C. McCarthy
 President and Chief Executive Officer
 
 /s/ William C. Zint
 William C. Zint
 Senior Vice President, Chief Financial Officer


v3.24.3
Document - shares
 9 Months Ended
Sep. 30, 2024
Oct. 24, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 1-7945  
Entity Registrant Name DELUXE CORPORATION  
Entity Central Index Key 0000027996  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Entity Incorporation, State or Country Code MN  
Entity Tax Identification Number 41-0216800  
Entity Address, Address Line One 801 S. Marquette Ave.  
Entity Address, City or Town Minneapolis  
Entity Address, State or Province MN  
Entity Address, Postal Zip Code 55402-2807  
City Area Code 651  
Local Phone Number 483-7111  
Title of 12(b) Security Common Stock, par value $1.00 per share  
Trading Symbol DLX  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   44,272,246
v3.24.3
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents, including securities carried at fair value of $22,000 as of December 31, 2023 $ 41,307 $ 71,962
Trade accounts receivable, net of allowance for credit losses 172,260 191,005
Inventories and supplies, net of reserve 39,602 42,088
Funds held for customers 41,258 383,134
Prepaid expenses 37,084 30,116
Revenue in excess of billings 29,923 26,107
Other current assets 31,203 16,576
Total current assets 392,637 760,988
Deferred income taxes 8,745 8,694
Long-term investments 62,285 61,924
Property, plant and equipment, net of accumulated depreciation of $350,084 and $334,101, respectively 110,623 116,539
Operating lease assets 51,960 58,961
Intangibles, net of accumulated amortization of $790,413 and $775,190, respectively 337,813 391,744
Goodwill 1,423,861 1,430,590
Other non-current assets 234,993 251,182
Total assets 2,622,917 3,080,622
Current liabilities:    
Accounts payable 161,126 154,863
Funds held for customers 42,683 386,622
Accrued liabilities 152,031 191,427
Current portion of long-term debt 71,914 86,153
Total current liabilities 427,754 819,065
Long-term debt 1,459,613 1,506,698
Operating lease liabilities 51,641 58,840
Deferred income taxes 3,966 22,649
Other non-current liabilities 67,258 68,754
Commitments and contingencies (Note 13)
Shareholders' equity:    
Common shares $1 par value (authorized: 500,000 shares; outstanding: September 30, 2024 - 44,272; December 31, 2023 - 43,743) 44,272 43,743
Additional paid-in capital 111,679 99,141
Retained earnings 490,460 491,238
Accumulated other comprehensive loss (33,852) (30,028)
Non-controlling interest 126 522
Total shareholders' equity 612,685 604,616
Total liabilities and shareholders' equity $ 2,622,917 $ 3,080,622
v3.24.3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($)
shares in Thousands, $ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Cash and cash equivalents, securities carried at fair value   $ 22,000
Accumulated depreciation $ 350,084 334,101
Accumulated amortization $ 790,413 $ 775,190
Common stock, par value (per share) $ 1 $ 1
Common stock, shares authorized 500,000 500,000
Common stock, shares outstanding 44,272 43,743
v3.24.3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Total revenue $ 528,444 $ 537,844 $ 1,601,215 $ 1,654,896
Total cost of revenue (246,577) (255,127) (747,020) (775,737)
Gross profit 281,867 282,717 854,195 879,159
Selling, general and administrative expense (227,764) (233,891) (695,677) (726,880)
Restructuring and integration expense (11,031) (22,935) (35,899) (60,067)
Asset impairment charge (6,700) 0 (6,700) 0
Gain (loss) on sale of businesses and long-lived assets 5,208 (4,324) 29,190 17,618
Operating income 41,580 21,567 145,109 109,830
Interest expense (29,905) (32,034) (90,910) (93,982)
Other income, net 1,834 1,316 6,560 4,562
Income (loss) before income taxes 13,509 (9,151) 60,759 20,410
Income tax (provision) benefit (4,540) 1,194 (20,463) (9,186)
Net income (loss) 8,969 (7,957) 40,296 11,224
Net income attributable to non-controlling interest (38) (26) (103) (80)
Net income (loss) attributable to Deluxe 8,931 (7,983) 40,193 11,144
Total comprehensive income (loss) 1,017 (5,716) 36,472 19,838
Comprehensive income (loss) attributable to Deluxe $ 979 $ (5,742) $ 36,369 $ 19,758
Basic earnings (loss) per share $ 0.20 $ (0.18) $ 0.91 $ 0.26
Diluted earnings (loss) per share $ 0.20 $ (0.18) $ 0.90 $ 0.25
Product [Member]        
Total revenue $ 298,693 $ 304,840 $ 908,230 $ 938,872
Total cost of revenue (109,090) (118,050) (338,595) (361,938)
Service [Member]        
Total revenue 229,751 233,004 692,985 716,024
Total cost of revenue $ (137,487) $ (137,077) $ (408,425) $ (413,799)
v3.24.3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
Total
Common shares par value [Member]
Additional paid-in capital [Member]
Retained earnings [Member]
Accumulated other comprehensive loss [Member]
Non-controlling interest [Member]
Balance, beginning of period at Dec. 31, 2022 $ 604,224 $ 43,204 $ 79,234 $ 518,635 $ (37,264) $ 415
Balance (in shares) at Dec. 31, 2022 43,204          
Net income (loss) attributable to Deluxe $ 11,144     11,144    
Net income attributable to non-controlling interest 80         80
Net income (loss) 11,224          
Cash dividends ($0.30 per share for the quarters ended September 30, 2024 and 2023 and $0.90 per share for the nine months ended September 30, 2024 and 2023) (40,102)     (40,102)    
Common shares issued, net of tax withholding $ (241) 487 (728)      
Common shares issued, net of tax withholding (in shares) 487          
Employee share-based compensation $ 15,667   15,667      
Other comprehensive income (loss) 8,614       8,614  
Balance, end of period at Sep. 30, 2023 $ 599,386 43,691 94,173 489,677 (28,650) 495
Balance (in shares) at Sep. 30, 2023 43,691          
Balance, beginning of period at Jun. 30, 2023 $ 613,629 43,613 89,380 511,058 (30,891) 469
Balance (in shares) at Jun. 30, 2023 43,613          
Net income (loss) attributable to Deluxe $ (7,983)     (7,983)    
Net income attributable to non-controlling interest 26         26
Net income (loss) (7,957)          
Cash dividends ($0.30 per share for the quarters ended September 30, 2024 and 2023 and $0.90 per share for the nine months ended September 30, 2024 and 2023) (13,398)     (13,398)    
Common shares issued, net of tax withholding $ 463 78 385      
Common shares issued, net of tax withholding (in shares) 78          
Employee share-based compensation $ 4,408   4,408      
Other comprehensive income (loss) 2,241       2,241  
Balance, end of period at Sep. 30, 2023 $ 599,386 43,691 94,173 489,677 (28,650) 495
Balance (in shares) at Sep. 30, 2023 43,691          
Balance, beginning of period at Dec. 31, 2023 $ 604,616 43,743 99,141 491,238 (30,028) 522
Balance (in shares) at Dec. 31, 2023 43,743          
Net income (loss) attributable to Deluxe $ 40,193     40,193    
Net income attributable to non-controlling interest 103         103
Net income (loss) 40,296          
Cash dividends ($0.30 per share for the quarters ended September 30, 2024 and 2023 and $0.90 per share for the nine months ended September 30, 2024 and 2023) (40,971)     (40,971)    
Common shares issued, net of tax withholding $ (1,951) 529 (2,480)      
Common shares issued, net of tax withholding (in shares) 529          
Employee share-based compensation $ 15,018   15,018      
Other comprehensive income (loss) (3,824)       (3,824)  
Dividend paid to non-controlling interest (499)         (499)
Balance, end of period at Sep. 30, 2024 $ 612,685 44,272 111,679 490,460 (33,852) 126
Balance (in shares) at Sep. 30, 2024 44,272          
Balance, beginning of period at Jun. 30, 2024 $ 620,476 44,210 106,466 495,113 (25,900) 587
Balance (in shares) at Jun. 30, 2024 44,210          
Net income (loss) attributable to Deluxe $ 8,931     8,931    
Net income attributable to non-controlling interest 38         38
Net income (loss) 8,969          
Cash dividends ($0.30 per share for the quarters ended September 30, 2024 and 2023 and $0.90 per share for the nine months ended September 30, 2024 and 2023) (13,584)     (13,584)    
Common shares issued, net of tax withholding $ 428 62 366      
Common shares issued, net of tax withholding (in shares) 62          
Employee share-based compensation $ 4,847   4,847      
Other comprehensive income (loss) (7,952)       (7,952)  
Dividend paid to non-controlling interest (499)         (499)
Balance, end of period at Sep. 30, 2024 $ 612,685 $ 44,272 $ 111,679 $ 490,460 $ (33,852) $ 126
Balance (in shares) at Sep. 30, 2024 44,272          
v3.24.3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parentheticals) - $ / shares
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]        
Cash dividends per share $ 0.30 $ 0.30 $ 0.90 $ 0.90
v3.24.3
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash flows from operating activities:    
Net income $ 40,296 $ 11,224
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation 16,026 14,968
Amortization of intangibles 111,690 110,017
Asset impairment charge 6,700 0
Amortization of prepaid product discounts 24,844 25,291
Employee share-based compensation expense 14,972 15,889
Operating lease expense 14,011 14,387
Amortization of cloud computing arrangement implementation costs 12,362 11,682
Gain on sale of businesses and long-lived assets (29,190) (17,618)
Deferred income taxes (17,808) (20,406)
Other non-cash items, net 31,146 24,911
Changes in assets and liabilities:    
Trade accounts receivable 6,593 (3,846)
Inventories and supplies (877) (625)
Payments for cloud computing arrangement implementation costs (475) (6,944)
Other current and non-current assets (33,581) (260)
Accounts payable 8,721 10,429
Prepaid product discount payments (22,945) (21,798)
Other accrued and non-current liabilities (48,363) (52,395)
Net cash provided by operating activities 134,122 114,906
Cash flows from investing activities:    
Purchases of capital assets (69,777) (80,809)
Proceeds from sale of businesses and long-lived assets 18,321 39,872
Other 133 (9,798)
Net cash used by investing activities (51,323) (50,735)
Cash flows from financing activities:    
Proceeds from issuing long-term debt and swingline loans, net of debt issuance costs 630,784 531,000
Payments on long-term debt and swingline loans (695,295) (545,532)
Net change in customer funds obligations (338,955) (150,936)
Cash dividends paid to shareholders (40,826) (40,140)
Other (7,789) (7,982)
Net cash used by financing activities (452,081) (213,590)
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents (3,156) 993
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents (372,438) (148,426)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year 458,033 337,415
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period (Note 3) $ 85,595 $ 188,989
v3.24.3
Consolidated financial statements
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Consolidated financial statements
NOTE 1: CONSOLIDATED FINANCIAL STATEMENTS

The consolidated balance sheet as of September 30, 2024, the consolidated statements of comprehensive income (loss) for the quarters and nine months ended September 30, 2024 and 2023, the consolidated statements of shareholders’ equity for the quarters and nine months ended September 30, 2024 and 2023 and the consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023 are unaudited. The consolidated balance sheet as of December 31, 2023 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles ("GAAP"). In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any items discussed in the notes below. Interim results are not necessarily indicative of results for a full year or future results. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K").

The preparation of the consolidated financial statements requires us to make certain estimates and assumptions affecting the amounts reported in the consolidated financial statements and related notes. We base our estimates on historical experience and on various other factors and assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of our assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Actual results may differ significantly from our estimates and assumptions.

Comparability – The consolidated statement of cash flows for the nine months ended September 30, 2023 has been modified to conform to the current year presentation. Within net cash provided by operating activities, other current and other non-current assets have been combined. In addition, amortization of cloud computing arrangement implementation costs is presented separately. Previously, this amount was included in other non-cash items, net. Within net cash used by financing activities, employee taxes paid for shares withheld is included in other. Previously, this amount was presented separately. The consolidated statements of shareholders' equity for the quarter and nine months ended September 30, 2023 have also been modified to conform to the current year presentation. Common shares retired are included in common shares issued, net of tax withholding. Previously, these amounts were presented separately.
v3.24.3
New accounting pronouncements
 9 Months Ended
Sep. 30, 2024
Accounting Standards Update and Change in Accounting Principle [Abstract]  
New accounting pronouncements
NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS

ASU No. 2023-07 – In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on the related disclosures within our consolidated financial statements.

ASU No. 2023-09 – In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures, which modifies the required income tax disclosures to include specific categories in the income tax rate reconciliation and to require the disclosure of income tax payments by jurisdiction, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The standard is required to be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on the related disclosures within our consolidated financial statements.
v3.24.3
Supplemental balance sheet and cash flow information
 9 Months Ended
Sep. 30, 2024
Balance Sheet Related Disclosures [Abstract]  
Supplemental balance sheet and cash flow information
NOTE 3: SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION

Trade accounts receivable – Net trade accounts receivable was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Trade accounts receivable – gross$183,466 $197,546 
Allowance for credit losses(11,206)(6,541)
Trade accounts receivable – net(1)
$172,260 $191,005 

(1) Includes unbilled receivables of $61,416 as of September 30, 2024 and $43,673 as of December 31, 2023.

Changes in the allowance for credit losses for the nine months ended September 30, 2024 and 2023 were as follows:
Nine Months Ended
September 30,
(in thousands)20242023
Balance, beginning of year$6,541 $4,182 
Bad debt expense12,040 5,191 
Write-offs and other(7,375)(2,774)
Balance, end of period$11,206 $6,599 

Inventories and supplies – Inventories and supplies were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Finished and semi-finished goods$34,425 $34,194 
Raw materials and supplies17,230 17,339 
Reserve for excess and obsolete items(12,053)(9,445)
Inventories and supplies, net of reserve$39,602 $42,088 

Available-for-sale debt securities – We did not hold any available-for-sale debt securities as of September 30, 2024. Available-for-sale debt securities held as of December 31, 2023 were comprised of the following:

 December 31, 2023
(in thousands)CostGross unrealized gainsGross unrealized lossesFair value
Cash equivalents:
Domestic money market fund$22,000 $— $— $22,000 
Available-for-sale debt securities$22,000 $— $— $22,000 
 
The domestic money market fund held highly liquid, short-term investments managed by the financial institution. Further information regarding the fair value of available-for-sale debt securities can be found in Note 8.

Revenue in excess of billings – Revenue in excess of billings was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Conditional right to receive consideration$15,745 $20,680 
Unconditional right to receive consideration(1)
14,178 5,427 
Revenue in excess of billings$29,923 $26,107 

(1) Represents revenues that are earned but not currently billable under the related contract terms.
Intangibles – Intangibles were comprised of the following:
 September 30, 2024December 31, 2023
(in thousands)Gross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Internal-use software$596,355 $(453,331)$143,024 $554,825 $(412,364)$142,461 
Customer lists/relationships345,208 (247,963)97,245 363,298 (235,557)127,741 
Partner relationships75,396 (17,660)57,736 74,911 (14,031)60,880 
Technology-based intangibles65,700 (27,783)37,917 97,633 (54,251)43,382 
Trade names39,367 (38,716)651 39,367 (23,792)15,575 
Software to be sold6,200 (4,960)1,240 36,900 (35,195)1,705 
Intangibles$1,128,226 $(790,413)$337,813 $1,166,934 $(775,190)$391,744 

Amortization of intangibles was $38,626 for the quarter ended September 30, 2024, $34,941 for the quarter ended September 30, 2023, $111,690 for the nine months ended September 30, 2024 and $110,017 for the nine months ended September 30, 2023. During the second quarter of 2024, we modified the useful life of a trade name asset that we no longer expect to utilize beyond 2024. This change resulted in incremental amortization expense of $6,674 during the quarter ended September 30, 2024 and $13,349 during the nine months ended September 30, 2024. The amount expected to be recognized during the fourth quarter of 2024 is not material.

Based on the intangibles in service as of September 30, 2024, estimated future amortization expense is as follows:
(in thousands)Estimated
amortization
expense
Remainder of 2024$32,230 
2025101,851 
202672,200 
202743,530 
202827,115 

In the normal course of business, we acquire and develop internal-use software. We also, at times, purchase customer list and partner relationship assets. During the nine months ended September 30, 2024, we acquired or developed $56,163 of internal-use software with a weighted-average useful life of 3 years. Other intangibles acquired during the period were not material.

Goodwill – In conjunction with the realignment of our reportable business segments effective January 1, 2024 (Note 15), the goodwill amounts by reportable segment as of December 31, 2023 have been recast to reflect our new segment structure. No goodwill impairment charges were recorded in conjunction with the segment realignment. Changes in goodwill by reportable segment and in total were as follows for the nine months ended September 30, 2024:
(in thousands)Merchant ServicesB2B Payments
Data Solutions(1)
Print(1)
All Other(1)
Total
Balance, December 31, 2023
$727,688 $160,431 $40,804 $493,924 $7,743 $1,430,590 
Asset impairment charge (Note 6)— — — — (6,700)(6,700)
Currency translation adjustment— — — (29)— (29)
Balance, September 30, 2024
$727,688 $160,431 $40,804 $493,895 $1,043 $1,423,861 

(1) The Data Solutions and Print balances are net of accumulated impairment charges of $145,584 and $193,699, respectively, for each period. All Other is net of accumulated impairment charges of $6,700 as of September 30, 2024.
Other non-current assets – Other non-current assets were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Postretirement benefit plan asset$101,211 $94,939 
Cloud computing arrangement implementation costs44,409 59,234 
Prepaid product discounts(1)
35,834 40,376 
Deferred contract acquisition costs(2)
17,995 21,103 
Loans and notes receivable from distributors, net of allowance for credit losses(3)
11,635 12,443 
Other23,909 23,087 
Other non-current assets$234,993 $251,182 

(1) Amortization of prepaid product discounts was $24,844 for the nine months ended September 30, 2024 and $25,291 for the nine months ended September 30, 2023.
(2) Amortization of deferred contract acquisition costs was $9,445 for the nine months ended September 30, 2024 and $8,088 for the nine months ended September 30, 2023.

(3) Amount includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,678 as of September 30, 2024 and $987 as of December 31, 2023.

Changes in the allowance for credit losses related to loans and notes receivable from distributors were as follows for the nine months ended September 30, 2024 and 2023:
Nine Months Ended
September 30,
(in thousands)20242023
Balance, beginning of year$928 $1,024 
Bad debt expense (benefit)184 (46)
Balance, end of period$1,112 $978 

Past due receivables and those on non-accrual status were not material as of September 30, 2024 or December 31, 2023.

We categorize loans and notes receivable into risk categories based on information about the ability of borrowers to service their debt, including current financial information, historical payment experience, current economic trends and other factors. The highest quality receivables are assigned a 1-2 internal grade. Those that have a potential weakness requiring management's attention are assigned a 3-4 internal grade.

The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of September 30, 2024. There were no write-offs or recoveries recorded during the nine months ended September 30, 2024.

Loans and notes receivable from distributors amortized cost basis by origination year
(in thousands)2024202320202019PriorTotal
Risk rating:
1-2 internal grade$943 $328 $895 $324 $11,223 $13,713 
3-4 internal grade— — — — 712 712 
Loans and notes receivable$943 $328 $895 $324 $11,935 $14,425 
Accrued liabilities – Accrued liabilities were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Employee bonuses, including sales incentives$32,308 $49,446 
Deferred revenue(1)
22,885 35,343 
Interest15,063 10,481 
Operating lease liabilities12,674 13,562 
Income taxes12,659 7,558 
Customer rebates11,313 12,718 
Wages and payroll liabilities, including vacation11,269 8,605 
Restructuring2,936 9,689 
Prepaid product discounts1,775 4,477 
Other29,149 39,548 
Accrued liabilities$152,031 $191,427 
 
(1) Revenue recognized for amounts included in deferred revenue at the beginning of the period was $30,707 for the nine months ended September 30, 2024 and $37,972 for the nine months ended September 30, 2023.

Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows:
(in thousands)September 30,
2024		September 30,
2023
Cash and cash equivalents$41,307 $42,189 
Restricted cash and restricted cash equivalents included in funds held for customers41,258 143,893 
Non-current restricted cash included in other non-current assets3,030 2,907 
Total cash, cash equivalents, restricted cash and restricted cash equivalents$85,595 $188,989 
v3.24.3
Earnings (loss) per share
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Earnings (loss) per share
NOTE 4: EARNINGS (LOSS) PER SHARE

The following table reflects the calculation of basic and diluted earnings (loss) per share. During each period, certain share-based awards, as noted below, were excluded from the calculation of diluted earnings (loss) per share because their effect would have been antidilutive.
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2024202320242023
Earnings (loss) per share – basic:  
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe8,931 (7,983)40,193 11,144 
Income allocated to participating securities(3)(9)(15)(29)
Income (loss) attributable to Deluxe available to common shareholders$8,928 $(7,992)$40,178 $11,115 
Weighted-average shares outstanding44,250 43,663 44,106 43,498 
Earnings (loss) per share – basic$0.20 $(0.18)$0.91 $0.26 
Earnings (loss) per share – diluted:
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe8,931 (7,983)40,193 11,144 
Income allocated to participating securities(3)(9)(12)(29)
Re-measurement of share-based awards classified as liabilities
(7)— (45)— 
Income (loss) attributable to Deluxe available to common shareholders$8,921 $(7,992)$40,136 $11,115 
Weighted-average shares outstanding44,250 43,663 44,106 43,498 
Dilutive impact of potential common shares556 — 550 273 
Weighted-average shares and potential common shares outstanding
44,806 43,663 44,656 43,771 
Earnings (loss) per share – diluted$0.20 $(0.18)$0.90 $0.25 
Antidilutive potential common shares excluded from calculation1,205 1,450 1,205 1,450 
v3.24.3
Other comprehensive income (loss)
 9 Months Ended
Sep. 30, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Other comprehensive income (loss)
NOTE 5: OTHER COMPREHENSIVE INCOME (LOSS)

Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income (loss) was as follows:
Accumulated other comprehensive loss componentsAmounts reclassified from accumulated other comprehensive lossAffected line item in consolidated statements of comprehensive income (loss)
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Amortization of postretirement benefit plan items:
Prior service credit$355 $355 $1,066 $1,066 Other income
Net actuarial loss(334)(568)(1,001)(1,705)Other income
Total amortization21 (213)65 (639)Other income
Tax (expense) benefit(44)17 (133)49 Income tax (provision) benefit
Amortization of postretirement benefit plan items, net of tax(23)(196)(68)(590)Net income (loss)
Realized gain on cash flow hedges
830 984 2,640 2,191 Interest expense
Tax expense
(223)(264)(712)(588)Income tax (provision) benefit
Realized gain on cash flow hedges, net of tax
607 720 1,928 1,603 Net income (loss)
Currency translation adjustment(1)
— — — (863)Gain (loss) on sale of businesses and long-lived assets
Total reclassifications, net of tax$584 $524 $1,860 $150 

(1) Relates to the sale of our North American web hosting business during the quarter ended June 30, 2023 (Note 6).

Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss for the nine months ended September 30, 2024 and 2023 were as follows:
(in thousands)Postretirement benefit plans
Net unrealized loss on cash flow hedges(1)
Currency translation adjustmentAccumulated other comprehensive loss
Balance, December 31, 2023
$(19,824)$(286)$(9,918)$(30,028)
Other comprehensive loss before reclassifications
— (1,013)(951)(1,964)
Amounts reclassified from accumulated other comprehensive loss
68 (1,928)— (1,860)
Net current-period other comprehensive income (loss)
68 (2,941)(951)(3,824)
Balance, September 30, 2024
$(19,756)$(3,227)$(10,869)$(33,852)

(1) Other comprehensive loss before reclassifications is net of an income tax benefit of $375.
(in thousands)Postretirement benefit plans
Net unrealized loss on debt securities(1)
Net unrealized gain on cash flow hedges(2)
Currency translation adjustmentAccumulated other comprehensive loss
Balance, December 31, 2022
$(26,872)$(909)$2,593 $(12,076)$(37,264)
Other comprehensive (loss) income before reclassifications
— (183)8,487 460 8,764 
Amounts reclassified from accumulated other comprehensive loss
590 — (1,603)863 (150)
Net current-period other comprehensive income (loss)
590 (183)6,884 1,323 8,614 
Balance, September 30, 2023
$(26,282)$(1,092)$9,477 $(10,753)$(28,650)

(1) Other comprehensive loss before reclassifications is net of an income tax benefit of $63.

(2) Other comprehensive income before reclassifications is net of income tax expense of $3,114.
v3.24.3
Divestitures
 9 Months Ended
Sep. 30, 2024
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract]  
Divestitures
NOTE 6: DIVESTITURES

In September and December 2023, we executed agreements allowing for the conversion of our U.S. and Canadian payroll and human resources services customers to other service providers. We recognized related income of $5,208 during the quarter ended September 30, 2024 and $28,190 during the nine months ended September 30, 2024, and we received related cash proceeds of $18,321 during the nine months ended September 30, 2024. The income recognized is included in gain (loss) on sale of businesses and long-lived assets on the consolidated statements of comprehensive income (loss). Recognition of the remaining income will be based on actual customer conversion and retention activity, which we expect to be completed during the fourth quarter of 2024. These businesses generated annual revenue of approximately $27,000 during 2023. During the quarter ended September 30, 2024, we recognized a related pretax goodwill impairment charge of $6,700, as we determined that the remaining cash flows expected to be generated by these businesses no longer supported the carrying value of the related reporting unit as of September 30, 2024. Subsequent to the impairment charge, the remaining goodwill balance for this reporting unit was $1,043. In conjunction with our phased transition out of these businesses, we expect that this goodwill will be fully impaired during the fourth quarter of 2024. During the nine months ended September 30, 2024, we also recognized a gain of $1,000 on the sale of a small business distributor customer list.

In June 2023, we completed the sale of our North American web hosting and logo design businesses for net cash proceeds of $31,230. During the quarter ended September 30, 2023, we recorded an out-of-period correcting adjustment that decreased the gain recognized on this sale by $4,457. This adjustment was not material to the period or any other historical interim or annual period. During the nine months ended September 30, 2023, we recognized a pretax gain of $17,486 on this sale. These businesses generated revenue of approximately $28,000 during 2023, through the sale date. Further information regarding this sale can be found under the caption "Note 6: Acquisition and Divestitures" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.
v3.24.3
Derivative financial instruments
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative financial instruments
NOTE 7: DERIVATIVE FINANCIAL INSTRUMENTS

As part of our interest rate risk management strategy, we have entered into interest rate swaps, which we designated as cash flow hedges, to mitigate variability in interest payments on a portion of our variable-rate debt (Note 12). Our derivative instruments were comprised of the following:

September 30,
2024		December 31,
2023
(in thousands)Notional amount
Interest rate(1)
MaturityBalance sheet locationFair value
asset / (liability)		Fair value
asset / (liability)
June 2023 amortizing interest rate swap:
$222,932 4.249 %June 2026Other non-current liabilities$(3,500)$(2,158)
March 2023
interest rate swap:
200,000 4.003 %March 2026Other non-current liabilities and other non-current assets(807)287 
September 2022 interest rate swap:
300,000 3.990 %September 2025Accrued liabilities and other non-current assets(73)1,519 

(1) In addition, an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, is paid on amounts outstanding under our credit facility (Note 12).

Changes in the fair values of the interest rate swaps are recorded in accumulated other comprehensive loss on the consolidated balance sheets and are subsequently reclassified to interest expense as interest payments are made on the variable-rate debt. The fair values of the derivatives are calculated based on the applicable reference rate curve on the date of measurement. The cash flow hedges were fully effective as of September 30, 2024 and December 31, 2023, and their impact on consolidated net income and the consolidated statements of cash flows was not material. We also expect that the amount that will be reclassified to interest expense during the next 12 months will not be material.
v3.24.3
Fair value measurements
Jul. 01, 2024
Fair Value Disclosures [Abstract]  
Fair value measurements
NOTE 8: FAIR VALUE MEASUREMENTS

Goodwill impairment analyses – Our policy regarding goodwill impairment can be found under the caption "Note 1: Significant Accounting Policies" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K. This policy explains our methodology for assessing the impairment of goodwill.

In completing the 2024 annual impairment analysis as of July 31, 2024, we elected to perform quantitative analyses for certain of our reporting units: Merchant Services, Treasury Management and Business Essentials. These quantitative analyses indicated that the estimated fair values of the reporting units exceeded their carrying values. In determining the estimated fair values of our reporting units, we are required to estimate a number of factors, including revenue growth rates; earnings before interest, taxes, depreciation and amortization ("EBITDA") margins; terminal growth rates; discount rates; and the allocation of shared and corporate items. These assumptions require significant judgement. Actual results may differ from our assumptions and may result in future impairment charges.

We elected to complete qualitative analyses for our remaining reporting units with goodwill. These qualitative analyses evaluated factors, including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the most recent quantitative analyses completed in prior periods. In completing these qualitative assessments, we noted no changes in events or circumstances that indicated it was more likely than not that the fair value of any reporting unit was less than its carrying amount. As such, no goodwill impairment charges were recorded as a result of our 2024 annual impairment analysis.

As of September 30, 2024, we also completed a quantitative analysis of the goodwill related to our U.S. and Canadian payroll and human resources services business, which we are currently in the process of exiting. This analysis resulted in a pretax goodwill impairment charge of $6,700 during the quarter ended September 30, 2024. Further information can be found in Note 6.

Recurring fair value measurements – Cash and cash equivalents included available-for-sale debt securities at December 31, 2023 (Note 3), which consisted of a domestic money market fund. The cost of the fund, which was traded in an active market, approximated its fair value because of the short-term nature of the underlying investments. The fair value of derivative instruments (Note 7) is calculated based on the applicable reference rate curve on the date of measurement.
Information regarding the fair values of our financial instruments was as follows:

 Fair value measurements using
September 30, 2024Quoted prices in active markets for identical assets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
(in thousands)Balance sheet locationCarrying valueFair value
Measured at fair value through comprehensive income:
Derivative liabilities (Note 7)Accrued liabilities and other non-current liabilities$(4,380)$(4,380)$— $(4,380)$— 
Amortized cost:
CashCash and cash equivalents41,307 41,307 41,307 — — 
CashFunds held for customers41,258 41,258 41,258 — — 
CashOther non-current assets3,030 3,030 3,030 — — 
Loans and notes receivable from distributors
Other current assets and other non-current assets13,314 14,278 — — 14,278 
Long-term debtCurrent portion of long-term debt and long-term debt1,531,527 1,515,895 — 1,515,895 — 
 Fair value measurements using
December 31, 2023Quoted prices in active markets for identical assets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
(in thousands)Balance sheet locationCarrying valueFair value
Measured at fair value through comprehensive income:
Available-for-sale debt securities
Cash and cash equivalents$22,000 $22,000 $22,000 $— $— 
Derivative assets (Note 7)Other non-current assets1,806 1,806 — 1,806 — 
Derivative liability (Note 7)Other non-current liabilities(2,158)(2,158)— (2,158)— 
Amortized cost:
CashCash and cash equivalents49,962 49,962 49,962 — — 
Cash
Funds held for customers383,134 383,134 383,134 — — 
Cash
Other non-current assets2,937 2,937 2,937 — — 
Loans and notes receivable from distributors
Other current assets and other non-current assets13,430 13,249 — — 13,249 
Long-term debt
Current portion of long-term debt and long-term debt1,592,851 1,554,028 — 1,554,028 — 
v3.24.3
Restructuring and integration expense
 9 Months Ended
Sep. 30, 2024
Restructuring and Related Activities [Abstract]  
Restructuring and integration expense
NOTE 9: RESTRUCTURING AND INTEGRATION EXPENSE

Restructuring and integration expense consists of costs related to initiatives to drive earnings and cash flow growth and also includes costs related to the consolidation and migration of certain applications and processes. These costs consist primarily of consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as costs related to facility closures and consolidations. In addition, we have recorded employee severance costs across functional areas. Restructuring and integration expense is not allocated to our reportable business segments.

We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of these initiatives is to further drive shareholder value by (1) expanding our EBITDA growth trajectory, (2) increasing cash flow, (3) paying down debt, and (4) improving our leverage ratio. Our various initiatives include a balanced mix of structural cost reductions focused on organizational structure, processes and operational improvements, in addition to workstreams to drive revenue growth. As part of these initiatives, we have already combined like-for-like capabilities, reduced management layers and consolidated core operations to run more efficiently and to create the ability to invest in high impact talent to accelerate our growth businesses of payments and data. The associated expense, which consisted primarily of consulting and severance costs, was approximately $11,000 during the quarter ended September 30, 2024 and $20,000 during the quarter ended September 30, 2023. For the nine months ended September 30, 2024 and September 30, 2023, the associated expense was approximately $33,000 and $35,000, respectively. To date, we have incurred expense of approximately $80,000, and we anticipate that we will incur additional North Star restructuring and integration expense of approximately $30,000 through 2025.
Restructuring and integration expense is reflected on the consolidated statements of comprehensive income (loss) as follows:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Total cost of revenue$234 $6,429 $1,132 $10,868 
Operating expenses11,031 22,935 35,899 60,067 
Restructuring and integration expense$11,265 $29,364 $37,031 $70,935 

Restructuring and integration expense for each period was comprised of the following:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
External consulting and other costs$8,614 $10,939 $25,733 $31,561 
Employee severance benefits902 11,179 2,459 17,526 
Internal labor381 2,469 1,602 6,341 
Other1,368 4,777 7,237 15,507 
Restructuring and integration expense$11,265 $29,364 $37,031 $70,935 

Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets and represent expected cash payments required to satisfy the remaining severance obligations to those employees already terminated and those expected to be terminated under our various initiatives. The majority of the employee reductions, as well as the related severance payments, are expected to be completed by mid-2025.

Changes in our restructuring and integration accruals were as follows:
(in thousands)Employee severance benefits
Balance, December 31, 2023
$9,689 
Charges2,961 
Reversals(502)
Payments(9,212)
Balance, September 30, 2024
$2,936 

The charges and reversals presented in the rollforward of our restructuring and integration accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued liabilities on the consolidated balance sheets.
v3.24.3
Income tax provision
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income tax provision
NOTE 10: INCOME TAX PROVISION

Our effective income tax rate was 33.6% for the quarter ended September 30, 2024 and 33.7% for the nine months ended September 30, 2024, compared to an effective income tax rate of 34.1% for the year ended December 31, 2023. While there was a larger tax rate benefit from business exit activity in 2023 than in 2024, the 2024 tax rate benefited from lower tax impacts for share-based compensation, foreign operations and tax return to provision adjustments. For comparison, the reconciliation of our effective income tax rate for 2023 to the U.S. federal statutory tax rate can be found under the caption "Note 10: Income Tax Provision" in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Our effective income tax rate for the quarter ended September 30, 2023 was 13.0%. This tax rate was driven by the pretax loss for the period, the impact of discrete items related to our business exit activity, and an increase in our state effective income tax rate during the quarter.
Our effective income tax rate for the nine months ended September 30, 2023 was 45.0%. This tax rate was driven by the lower pretax income for the period, combined with tax expense related to share-based compensation and our foreign operations, including the repatriation of foreign earnings.
v3.24.3
Postretirement benefits
 9 Months Ended
Sep. 30, 2024
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Postretirement benefits
NOTE 11: POSTRETIREMENT BENEFITS

We have historically provided certain health care benefits for eligible retired U.S. employees. In addition to our retiree health care plan, we also have a U.S. supplemental executive retirement plan. Further information regarding our postretirement benefit plans can be found under the caption “Note 12: Postretirement Benefits” in the Notes to Consolidated Financial Statements appearing in the 2023 Form 10-K.

Postretirement benefit income is included in other income, net on the consolidated statements of comprehensive income (loss) and consisted of the following components:
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Interest cost$435 $496 $1,306 $1,489 
Expected return on plan assets(2,099)(1,830)(6,296)(5,490)
Amortization of prior service credit(355)(355)(1,066)(1,066)
Amortization of net actuarial losses334 568 1,001 1,705 
Net periodic benefit income$(1,685)$(1,121)$(5,055)$(3,362)
v3.24.3
Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt
NOTE 12: DEBT

Debt outstanding was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Senior, secured term loan facility$790,563 $877,187 
Senior, unsecured notes475,000 475,000 
Amounts drawn on senior, secured revolving credit facility209,000 252,000 
Securitization obligations65,776 — 
Total principal amount1,540,339 1,604,187 
Less: unamortized discount and debt issuance costs(8,812)(11,336)
Total debt, net of discount and debt issuance costs1,531,527 1,592,851 
Less: current portion of long-term debt, net of debt issuance costs(71,914)(86,153)
Long-term debt$1,459,613 $1,506,698 

Maturities of long-term debt were as follows as of September 30, 2024:
(in thousands)Debt obligations
2025$101,063 
2026898,500 
202765,776 
2028— 
2029475,000 
Total principal amount$1,540,339 
Credit facility – In June 2021, we executed a senior, secured credit facility consisting of a revolving credit facility with commitments of $500,000 and a $1,155,000 term loan facility. The revolving credit facility includes a $40,000 swingline sub-facility and a $25,000 letter of credit sub-facility. Loans under the revolving credit facility may be borrowed, repaid and re-borrowed until June 1, 2026, at which time all amounts borrowed must be repaid. The term loan facility is required to be repaid in equal quarterly installments of $21,656 through June 30, 2025 and $28,875 from September 30, 2025 through March 31, 2026. The remaining balance is due on June 1, 2026. The term loan facility also includes mandatory prepayment requirements related to asset sales, new debt (other than permitted debt) and excess cash flow, subject to certain limitations. No premium or penalty is payable in connection with any mandatory or voluntary prepayment of the term loan facility.

Interest is payable on the credit facility at a fluctuating rate of interest determined by reference to the Secured Overnight Financing Rate ("SOFR") plus an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, as defined in the credit agreement, and a commitment fee is payable on the unused portion of the revolving credit facility. Amounts outstanding under the credit facility had a weighted-average interest rate of 6.60% as of September 30, 2024 and 6.83% as of December 31, 2023, including the impact of interest rate swaps that effectively convert a portion of our variable-rate debt to fixed-rate debt. Further information regarding the interest rate swaps can be found in Note 7.

Borrowings under the credit facility are collateralized by substantially all of the present and future tangible and intangible personal property held by us and our subsidiaries that have guaranteed our obligations under the credit facility, subject to certain exceptions. The credit agreement contains customary covenants regarding limits on levels of indebtedness, liens, mergers, certain asset dispositions, changes in business, advances, investments, loans and restricted payments. The covenants are subject to a number of limitations and exceptions set forth in the credit agreement.

The credit agreement also includes requirements regarding our consolidated total leverage ratio and our consolidated secured leverage ratio, as defined in the credit agreement. During each remaining quarterly period, the consolidated total leverage ratio may not equal or exceed 4.25 to 1.00 and the consolidated secured leverage ratio may not equal or exceed 3.50 to 1.00. In addition, we must maintain a minimum interest coverage ratio of at least 3.00 to 1.00 throughout the remaining term of the credit facility. Failure to meet any of the above requirements would result in an event of default that would allow lenders to declare amounts outstanding immediately due and payable and would allow the lenders to enforce their interests against collateral pledged if we are unable to settle the amounts outstanding. We were in compliance with all debt covenants as of September 30, 2024.

The credit agreement contains customary representations and warranties and, as a condition to borrowing, requires that all such representations and warranties be true and correct in all material respects on the date of each borrowing, including representations as to no material adverse change in our business, assets, operations or financial condition. If our consolidated total leverage ratio exceeds 2.75 to 1.00, the aggregate annual amount of permitted dividends and share repurchases in connection with incentive-based equity and compensation is limited to $60,000.

As of September 30, 2024, amounts available for borrowing under our revolving credit facility were as follows:
(in thousands)Available borrowings
Revolving credit facility commitment$500,000 
Amounts drawn on revolving credit facility(209,000)
Outstanding letters of credit(1)
(7,673)
Net available for borrowing as of September 30, 2024
$283,327 

(1) We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our revolving credit facility.

Senior, unsecured notes – In June 2021, we issued $500,000 of 8.0% senior unsecured notes that mature in June 2029. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. Proceeds from the offering, net of discount and offering costs, were $490,741, resulting in an effective interest rate of 8.3%. The net proceeds from the notes were used to fund the acquisition of First American Payment Systems, L.P. in June 2021. Interest payments are due each June and December. During 2022, we settled $25,000 of these notes via open market purchases.

The indenture governing the notes contains covenants that limit our ability and the ability of our restricted subsidiaries to, among other things, incur additional indebtedness and liens, issue redeemable stock and preferred stock, pay dividends and distributions, make loans and investments, and consolidate or merge or sell all or substantially all of our assets.

Securitization facility – In March 2024, Deluxe Receivables LLC, a wholly-owned subsidiary, entered into a receivables financing agreement (the “Securitization Facility”) with a group of financial institutions. The agreement terminates in March 2027, unless extended in accordance with its terms. The maximum amount available under the Securitization Facility is $80,000,
subject to certain borrowing base adjustments. Under the agreement, we sold and will continue to automatically sell certain of our accounts receivable to the subsidiary as collateral for borrowings under the facility. Borrowings bear interest at SOFR plus an applicable margin, and a commitment fee is payable on the unused portion of the facility. Interest and fees are due monthly. As of September 30, 2024, $65,776 was outstanding under the facility at an interest rate of 6.64%. We utilized the proceeds from these borrowings to prepay amounts due under our secured term loan facility.

The Securitization Facility is accounted for as a collateralized financing activity, rather than the sale of assets. As such, the subsidiary is consolidated, and the receivable balances pledged as collateral are presented as accounts receivable on the consolidated balance sheet, and the borrowings are presented as long-term debt. Cash receipts related to the underlying receivables are reflected as operating cash flows and borrowings and repayments under the collateralized loans are reflected as financing cash flows within the consolidated statement of cash flows.
v3.24.3
Other commitments and contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Other commitments and contingencies
NOTE 13: OTHER COMMITMENTS AND CONTINGENCIES

Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnification provisions generally encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of the terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal matters related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, we do not believe that any liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. We have recorded liabilities for known indemnifications related to environmental matters. These liabilities were not material as of September 30, 2024 or December 31, 2023.

Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits for active employees and those employees on long-term disability. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported, and totaled $9,047 as of September 30, 2024 and $9,024 as of December 31, 2023. These accruals are included in accrued liabilities and other non-current liabilities on the consolidated balance sheets. Our workers' compensation liability is recorded at present value. The difference between the discounted and undiscounted liability was not material as of September 30, 2024 or December 31, 2023.

Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends.

Litigation – Recorded liabilities for legal matters, as well as related charges recorded in each period, were not material to our financial position, results of operations or cash flows during the periods presented, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or cash flows, upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or cash flows in the period in which the ruling occurs or in future periods.
v3.24.3
Shareholders' equity
 9 Months Ended
Sep. 30, 2024
Stockholders' Equity Note [Abstract]  
Shareholders' equity
NOTE 14: SHAREHOLDERS' EQUITY

In October 2018, our board of directors authorized the repurchase of up to $500,000 of our common stock. This authorization has no expiration date. No shares were repurchased under this authorization during the nine months ended September 30, 2024 or September 30, 2023, and $287,452 remained available for repurchase as of September 30, 2024.
v3.24.3
Business segment information
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Business segment information
NOTE 15: BUSINESS SEGMENT INFORMATION

Effective January 1, 2024, we revised our reportable business segments to align with structural and management reporting changes that better reflect our portfolio mix and offerings. We now operate the following reportable segments, generally organized by product and service type:

•Merchant Services – provides electronic credit and debit card authorization and payment systems and processing services, primarily to small and medium-sized retail and service businesses.

•B2B Payments – provides treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management, as well as fraud and security services and Deluxe Payment Exchange+, an accounts payable automation solution.

•Data Solutions – provides data-driven marketing solutions, including digital engagement, financial institution profitability reporting and account switching tools, and business incorporation services.

•Print – provides printed personal and business checks, printed business forms, business accessories and promotional products.

The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2023 Form 10-K. We allocate corporate costs for our shared services functions to our business segments when the costs are directly attributable to a segment. This includes certain sales and marketing, supply chain, real estate, finance, information technology and legal costs. Costs that are not directly attributable to a business segment are reported as Corporate operations and consist primarily of marketing, accounting, information technology, human resources, facilities, executive management, and legal, tax and treasury costs that support the corporate function.

All of our segments operate primarily in the U.S., with some operations in Canada. Through June 2023, we operated our former web hosting business in portions of Europe and through partners in Central and South America. Revenue and long-lived assets related to our foreign operations were not material to our consolidated financial statements during the periods covered by this report. No single customer accounted for more than 10% of consolidated revenue during the nine months ended September 30, 2024 and 2023.

Our chief operating decision maker ("CODM") is our Chief Executive Officer. He reviews EBITDA on an adjusted basis for each segment when deciding how to allocate resources and to assess segment operating performance. Adjusted EBITDA for each segment excludes depreciation and amortization expense, interest expense, income tax expense and certain other amounts, which may include, from time to time: asset impairment charges; restructuring and integration expense; share-based compensation expense; acquisition transaction costs; certain legal-related expenses outside of the normal course of business; and gains or losses on sales of businesses and long-lived assets. The CODM does not review segment asset information when making investment or operating decisions regarding our reportable business segments.
The following is our segment information for the quarters and nine months ended September 30, 2024 and 2023. The segment information for 2023 has been recast to reflect our current segment structure.

Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Merchant Services:
Revenue$93,531 $87,984 $288,536 $268,556 
Adjusted EBITDA17,752 17,393 58,377 53,120 
B2B Payments:
Revenue75,140 74,581 214,788 226,118 
Adjusted EBITDA15,264 16,074 42,537 44,741 
Data Solutions:
Revenue61,065 64,080 178,169 167,735 
Adjusted EBITDA17,485 15,317 48,150 38,956 
Print:
Revenue297,313 304,282 909,393 942,839 
Adjusted EBITDA97,407 98,044 282,226 298,015 
Total reportable segments:
Revenue$527,049 $530,927 $1,590,886 $1,605,248 
Adjusted EBITDA147,908 146,828 431,290 434,832 
All other:(1)
Revenue1,395 6,917 10,329 49,648 
Adjusted EBITDA448 4,130 5,672 22,170 
Total:
Revenue$528,444 $537,844 $1,601,215 $1,654,896 
Adjusted EBITDA148,356 150,958 436,962 457,002 

(1) Includes our North American web hosting and logo design businesses, which were sold in June 2023, and our payroll and human resources services business, which we are in the process of exiting (Note 6).

The following table presents the reconciliation of total segment adjusted EBITDA to consolidated income (loss) before income taxes:
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Total segment adjusted EBITDA$148,356 $150,958 $436,962 $457,002 
Corporate operations(43,454)(49,068)(128,217)(146,304)
Depreciation and amortization expense(44,277)(38,857)(127,716)(124,985)
Interest expense(29,905)(32,034)(90,910)(93,982)
Net income attributable to non-controlling interest38 26 103 80 
Asset impairment charge(6,700)— (6,700)— 
Restructuring and integration expense(11,265)(29,364)(37,031)(70,935)
Share-based compensation expense(4,842)(4,539)(14,972)(15,889)
Certain legal-related benefit (expense)350 (1,949)50 (2,195)
Gain (loss) on sale of businesses and long-lived assets5,208 (4,324)29,190 17,618 
Income (loss) before income taxes$13,509 $(9,151)$60,759 $20,410 
The following tables present revenue disaggregated by our product and service offerings:
Quarter Ended September 30, 2024
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $176,827 $— $176,827 
Merchant services93,531 — — — — 93,531 
Promotional solutions— — — 61,264 — 61,264 
Forms and other business products— — — 59,222 — 59,222 
Treasury management solutions
— 58,574 — — — 58,574 
Data-driven marketing— — 56,520 — — 56,520 
Other— 16,566 4,545 — 1,395 22,506 
Total revenue$93,531 $75,140 $61,065 $297,313 $1,395 $528,444 
Quarter Ended September 30, 2023
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
other		Consolidated
Checks$— $— $— $179,990 $— $179,990 
Merchant services87,984 — — — — 87,984 
Promotional solutions— — — 62,309 — 62,309 
Forms and other business products— — — 61,983 — 61,983 
Treasury management solutions
— 59,224 — — — 59,224 
Data-driven marketing— — 59,561 — — 59,561 
Other— 15,357 4,519 — 6,917 26,793 
Total revenue$87,984 $74,581 $64,080 $304,282 $6,917 $537,844 
Nine Months Ended September 30, 2024
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $534,672 $— $534,672 
Merchant services288,536 — — — — 288,536 
Promotional solutions— — — 193,343 — 193,343 
Forms and other business products— — — 181,378 — 181,378 
Treasury management solutions
— 169,000 — — — 169,000 
Data-driven marketing— — 163,339 — — 163,339 
Other— 45,788 14,830 — 10,329 70,947 
Total revenue$288,536 $214,788 $178,169 $909,393 $10,329 $1,601,215 
Nine Months Ended September 30, 2023
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $545,061 $— $545,061 
Merchant services268,556 — — — — 268,556 
Promotional solutions— — — 203,542 1,456 204,998 
Forms and other business products— — — 194,236 — 194,236 
Treasury management solutions— 180,864 — — — 180,864 
Data-driven marketing— — 153,346 — — 153,346 
Other— 45,254 14,389 — 48,192 107,835 
Total revenue$268,556 $226,118 $167,735 $942,839 $49,648 $1,654,896 
v3.24.3
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure        
Net income (loss) attributable to Deluxe $ 8,931 $ (7,983) $ 40,193 $ 11,144
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
Consolidated financial statements (Policies)
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Comparability
Comparability – The consolidated statement of cash flows for the nine months ended September 30, 2023 has been modified to conform to the current year presentation. Within net cash provided by operating activities, other current and other non-current assets have been combined. In addition, amortization of cloud computing arrangement implementation costs is presented separately. Previously, this amount was included in other non-cash items, net. Within net cash used by financing activities, employee taxes paid for shares withheld is included in other. Previously, this amount was presented separately. The consolidated statements of shareholders' equity for the quarter and nine months ended September 30, 2023 have also been modified to conform to the current year presentation. Common shares retired are included in common shares issued, net of tax withholding. Previously, these amounts were presented separately.
v3.24.3
Supplemental balance sheet and cash flow information (Tables)
 9 Months Ended
Sep. 30, 2024
Inventories and supplies
Inventories and supplies – Inventories and supplies were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Finished and semi-finished goods$34,425 $34,194 
Raw materials and supplies17,230 17,339 
Reserve for excess and obsolete items(12,053)(9,445)
Inventories and supplies, net of reserve$39,602 $42,088 
Available-for-sale debt securities
Available-for-sale debt securities – We did not hold any available-for-sale debt securities as of September 30, 2024. Available-for-sale debt securities held as of December 31, 2023 were comprised of the following:

 December 31, 2023
(in thousands)CostGross unrealized gainsGross unrealized lossesFair value
Cash equivalents:
Domestic money market fund$22,000 $— $— $22,000 
Available-for-sale debt securities$22,000 $— $— $22,000 
Revenue in excess of billings
Revenue in excess of billings – Revenue in excess of billings was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Conditional right to receive consideration$15,745 $20,680 
Unconditional right to receive consideration(1)
14,178 5,427 
Revenue in excess of billings$29,923 $26,107 

(1) Represents revenues that are earned but not currently billable under the related contract terms.
Intangibles
Intangibles – Intangibles were comprised of the following:
 September 30, 2024December 31, 2023
(in thousands)Gross carrying amountAccumulated amortizationNet carrying amountGross carrying amountAccumulated amortizationNet carrying amount
Internal-use software$596,355 $(453,331)$143,024 $554,825 $(412,364)$142,461 
Customer lists/relationships345,208 (247,963)97,245 363,298 (235,557)127,741 
Partner relationships75,396 (17,660)57,736 74,911 (14,031)60,880 
Technology-based intangibles65,700 (27,783)37,917 97,633 (54,251)43,382 
Trade names39,367 (38,716)651 39,367 (23,792)15,575 
Software to be sold6,200 (4,960)1,240 36,900 (35,195)1,705 
Intangibles$1,128,226 $(790,413)$337,813 $1,166,934 $(775,190)$391,744 
Estimated future amortization expense
Based on the intangibles in service as of September 30, 2024, estimated future amortization expense is as follows:
(in thousands)Estimated
amortization
expense
Remainder of 2024$32,230 
2025101,851 
202672,200 
202743,530 
202827,115 
Goodwill
Goodwill – In conjunction with the realignment of our reportable business segments effective January 1, 2024 (Note 15), the goodwill amounts by reportable segment as of December 31, 2023 have been recast to reflect our new segment structure. No goodwill impairment charges were recorded in conjunction with the segment realignment. Changes in goodwill by reportable segment and in total were as follows for the nine months ended September 30, 2024:
(in thousands)Merchant ServicesB2B Payments
Data Solutions(1)
Print(1)
All Other(1)
Total
Balance, December 31, 2023
$727,688 $160,431 $40,804 $493,924 $7,743 $1,430,590 
Asset impairment charge (Note 6)— — — — (6,700)(6,700)
Currency translation adjustment— — — (29)— (29)
Balance, September 30, 2024
$727,688 $160,431 $40,804 $493,895 $1,043 $1,423,861 

(1) The Data Solutions and Print balances are net of accumulated impairment charges of $145,584 and $193,699, respectively, for each period. All Other is net of accumulated impairment charges of $6,700 as of September 30, 2024.
Other non-current assets
Other non-current assets – Other non-current assets were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Postretirement benefit plan asset$101,211 $94,939 
Cloud computing arrangement implementation costs44,409 59,234 
Prepaid product discounts(1)
35,834 40,376 
Deferred contract acquisition costs(2)
17,995 21,103 
Loans and notes receivable from distributors, net of allowance for credit losses(3)
11,635 12,443 
Other23,909 23,087 
Other non-current assets$234,993 $251,182 

(1) Amortization of prepaid product discounts was $24,844 for the nine months ended September 30, 2024 and $25,291 for the nine months ended September 30, 2023.
(2) Amortization of deferred contract acquisition costs was $9,445 for the nine months ended September 30, 2024 and $8,088 for the nine months ended September 30, 2023.

(3) Amount includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,678 as of September 30, 2024 and $987 as of December 31, 2023.
Loans and notes receivable by credit quality Indicator
The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of September 30, 2024. There were no write-offs or recoveries recorded during the nine months ended September 30, 2024.

Loans and notes receivable from distributors amortized cost basis by origination year
(in thousands)2024202320202019PriorTotal
Risk rating:
1-2 internal grade$943 $328 $895 $324 $11,223 $13,713 
3-4 internal grade— — — — 712 712 
Loans and notes receivable$943 $328 $895 $324 $11,935 $14,425 
Accrued liabilities
Accrued liabilities – Accrued liabilities were comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Employee bonuses, including sales incentives$32,308 $49,446 
Deferred revenue(1)
22,885 35,343 
Interest15,063 10,481 
Operating lease liabilities12,674 13,562 
Income taxes12,659 7,558 
Customer rebates11,313 12,718 
Wages and payroll liabilities, including vacation11,269 8,605 
Restructuring2,936 9,689 
Prepaid product discounts1,775 4,477 
Other29,149 39,548 
Accrued liabilities$152,031 $191,427 
 
(1) Revenue recognized for amounts included in deferred revenue at the beginning of the period was $30,707 for the nine months ended September 30, 2024 and $37,972 for the nine months ended September 30, 2023.
Supplemental cash flow information
Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows:
(in thousands)September 30,
2024		September 30,
2023
Cash and cash equivalents$41,307 $42,189 
Restricted cash and restricted cash equivalents included in funds held for customers41,258 143,893 
Non-current restricted cash included in other non-current assets3,030 2,907 
Total cash, cash equivalents, restricted cash and restricted cash equivalents$85,595 $188,989 
Trade accounts receivable [Member]  
Allowance for credit losses
Trade accounts receivable – Net trade accounts receivable was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Trade accounts receivable – gross$183,466 $197,546 
Allowance for credit losses(11,206)(6,541)
Trade accounts receivable – net(1)
$172,260 $191,005 

(1) Includes unbilled receivables of $61,416 as of September 30, 2024 and $43,673 as of December 31, 2023.

Changes in the allowance for credit losses for the nine months ended September 30, 2024 and 2023 were as follows:
Nine Months Ended
September 30,
(in thousands)20242023
Balance, beginning of year$6,541 $4,182 
Bad debt expense12,040 5,191 
Write-offs and other(7,375)(2,774)
Balance, end of period$11,206 $6,599 
Loans and notes receivable [Member]  
Allowance for credit losses
Changes in the allowance for credit losses related to loans and notes receivable from distributors were as follows for the nine months ended September 30, 2024 and 2023:
Nine Months Ended
September 30,
(in thousands)20242023
Balance, beginning of year$928 $1,024 
Bad debt expense (benefit)184 (46)
Balance, end of period$1,112 $978 
v3.24.3
Earnings (loss) per share (Tables)
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Earnings (loss) per share
The following table reflects the calculation of basic and diluted earnings (loss) per share. During each period, certain share-based awards, as noted below, were excluded from the calculation of diluted earnings (loss) per share because their effect would have been antidilutive.
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands, except per share amounts)2024202320242023
Earnings (loss) per share – basic:  
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe8,931 (7,983)40,193 11,144 
Income allocated to participating securities(3)(9)(15)(29)
Income (loss) attributable to Deluxe available to common shareholders$8,928 $(7,992)$40,178 $11,115 
Weighted-average shares outstanding44,250 43,663 44,106 43,498 
Earnings (loss) per share – basic$0.20 $(0.18)$0.91 $0.26 
Earnings (loss) per share – diluted:
Net income (loss)$8,969 $(7,957)$40,296 $11,224 
Net income attributable to non-controlling interest(38)(26)(103)(80)
Net income (loss) attributable to Deluxe8,931 (7,983)40,193 11,144 
Income allocated to participating securities(3)(9)(12)(29)
Re-measurement of share-based awards classified as liabilities
(7)— (45)— 
Income (loss) attributable to Deluxe available to common shareholders$8,921 $(7,992)$40,136 $11,115 
Weighted-average shares outstanding44,250 43,663 44,106 43,498 
Dilutive impact of potential common shares556 — 550 273 
Weighted-average shares and potential common shares outstanding
44,806 43,663 44,656 43,771 
Earnings (loss) per share – diluted$0.20 $(0.18)$0.90 $0.25 
Antidilutive potential common shares excluded from calculation1,205 1,450 1,205 1,450 
v3.24.3
Other comprehensive income (loss) (Tables)
 9 Months Ended
Sep. 30, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Reclassification adjustments
Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income (loss) was as follows:
Accumulated other comprehensive loss componentsAmounts reclassified from accumulated other comprehensive lossAffected line item in consolidated statements of comprehensive income (loss)
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Amortization of postretirement benefit plan items:
Prior service credit$355 $355 $1,066 $1,066 Other income
Net actuarial loss(334)(568)(1,001)(1,705)Other income
Total amortization21 (213)65 (639)Other income
Tax (expense) benefit(44)17 (133)49 Income tax (provision) benefit
Amortization of postretirement benefit plan items, net of tax(23)(196)(68)(590)Net income (loss)
Realized gain on cash flow hedges
830 984 2,640 2,191 Interest expense
Tax expense
(223)(264)(712)(588)Income tax (provision) benefit
Realized gain on cash flow hedges, net of tax
607 720 1,928 1,603 Net income (loss)
Currency translation adjustment(1)
— — — (863)Gain (loss) on sale of businesses and long-lived assets
Total reclassifications, net of tax$584 $524 $1,860 $150 

(1) Relates to the sale of our North American web hosting business during the quarter ended June 30, 2023 (Note 6).
Accumulated other comprehensive loss
Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss for the nine months ended September 30, 2024 and 2023 were as follows:
(in thousands)Postretirement benefit plans
Net unrealized loss on cash flow hedges(1)
Currency translation adjustmentAccumulated other comprehensive loss
Balance, December 31, 2023
$(19,824)$(286)$(9,918)$(30,028)
Other comprehensive loss before reclassifications
— (1,013)(951)(1,964)
Amounts reclassified from accumulated other comprehensive loss
68 (1,928)— (1,860)
Net current-period other comprehensive income (loss)
68 (2,941)(951)(3,824)
Balance, September 30, 2024
$(19,756)$(3,227)$(10,869)$(33,852)

(1) Other comprehensive loss before reclassifications is net of an income tax benefit of $375.
(in thousands)Postretirement benefit plans
Net unrealized loss on debt securities(1)
Net unrealized gain on cash flow hedges(2)
Currency translation adjustmentAccumulated other comprehensive loss
Balance, December 31, 2022
$(26,872)$(909)$2,593 $(12,076)$(37,264)
Other comprehensive (loss) income before reclassifications
— (183)8,487 460 8,764 
Amounts reclassified from accumulated other comprehensive loss
590 — (1,603)863 (150)
Net current-period other comprehensive income (loss)
590 (183)6,884 1,323 8,614 
Balance, September 30, 2023
$(26,282)$(1,092)$9,477 $(10,753)$(28,650)

(1) Other comprehensive loss before reclassifications is net of an income tax benefit of $63.

(2) Other comprehensive income before reclassifications is net of income tax expense of $3,114.
v3.24.3
Derivative financial instruments (Tables)
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative financial instruments Our derivative instruments were comprised of the following:
September 30,
2024		December 31,
2023
(in thousands)Notional amount
Interest rate(1)
MaturityBalance sheet locationFair value
asset / (liability)		Fair value
asset / (liability)
June 2023 amortizing interest rate swap:
$222,932 4.249 %June 2026Other non-current liabilities$(3,500)$(2,158)
March 2023
interest rate swap:
200,000 4.003 %March 2026Other non-current liabilities and other non-current assets(807)287 
September 2022 interest rate swap:
300,000 3.990 %September 2025Accrued liabilities and other non-current assets(73)1,519 
(1) In addition, an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, is paid on amounts outstanding under our credit facility (Note 12).
v3.24.3
Fair value measurements (Tables)
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair value of financial instruments
Information regarding the fair values of our financial instruments was as follows:

 Fair value measurements using
September 30, 2024Quoted prices in active markets for identical assets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
(in thousands)Balance sheet locationCarrying valueFair value
Measured at fair value through comprehensive income:
Derivative liabilities (Note 7)Accrued liabilities and other non-current liabilities$(4,380)$(4,380)$— $(4,380)$— 
Amortized cost:
CashCash and cash equivalents41,307 41,307 41,307 — — 
CashFunds held for customers41,258 41,258 41,258 — — 
CashOther non-current assets3,030 3,030 3,030 — — 
Loans and notes receivable from distributors
Other current assets and other non-current assets13,314 14,278 — — 14,278 
Long-term debtCurrent portion of long-term debt and long-term debt1,531,527 1,515,895 — 1,515,895 — 
 Fair value measurements using
December 31, 2023Quoted prices in active markets for identical assets
(Level 1)		Significant other observable inputs
(Level 2)		Significant unobservable inputs
(Level 3)
(in thousands)Balance sheet locationCarrying valueFair value
Measured at fair value through comprehensive income:
Available-for-sale debt securities
Cash and cash equivalents$22,000 $22,000 $22,000 $— $— 
Derivative assets (Note 7)Other non-current assets1,806 1,806 — 1,806 — 
Derivative liability (Note 7)Other non-current liabilities(2,158)(2,158)— (2,158)— 
Amortized cost:
CashCash and cash equivalents49,962 49,962 49,962 — — 
Cash
Funds held for customers383,134 383,134 383,134 — — 
Cash
Other non-current assets2,937 2,937 2,937 — — 
Loans and notes receivable from distributors
Other current assets and other non-current assets13,430 13,249 — — 13,249 
Long-term debt
Current portion of long-term debt and long-term debt1,592,851 1,554,028 — 1,554,028 — 
v3.24.3
Restructuring and integration expense (Tables)
 9 Months Ended
Sep. 30, 2024
Restructuring and Related Activities [Abstract]  
Restructuring and integration expense
Restructuring and integration expense is reflected on the consolidated statements of comprehensive income (loss) as follows:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Total cost of revenue$234 $6,429 $1,132 $10,868 
Operating expenses11,031 22,935 35,899 60,067 
Restructuring and integration expense$11,265 $29,364 $37,031 $70,935 

Restructuring and integration expense for each period was comprised of the following:
 Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
External consulting and other costs$8,614 $10,939 $25,733 $31,561 
Employee severance benefits902 11,179 2,459 17,526 
Internal labor381 2,469 1,602 6,341 
Other1,368 4,777 7,237 15,507 
Restructuring and integration expense$11,265 $29,364 $37,031 $70,935 
Changes in restructuring and integration accruals
Changes in our restructuring and integration accruals were as follows:
(in thousands)Employee severance benefits
Balance, December 31, 2023
$9,689 
Charges2,961 
Reversals(502)
Payments(9,212)
Balance, September 30, 2024
$2,936 
v3.24.3
Postretirement benefits (Tables)
 9 Months Ended
Sep. 30, 2024
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Components of net periodic benefit income
Postretirement benefit income is included in other income, net on the consolidated statements of comprehensive income (loss) and consisted of the following components:
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Interest cost$435 $496 $1,306 $1,489 
Expected return on plan assets(2,099)(1,830)(6,296)(5,490)
Amortization of prior service credit(355)(355)(1,066)(1,066)
Amortization of net actuarial losses334 568 1,001 1,705 
Net periodic benefit income$(1,685)$(1,121)$(5,055)$(3,362)
v3.24.3
Debt (Tables)
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt outstanding
Debt outstanding was comprised of the following:
(in thousands)September 30,
2024		December 31,
2023
Senior, secured term loan facility$790,563 $877,187 
Senior, unsecured notes475,000 475,000 
Amounts drawn on senior, secured revolving credit facility209,000 252,000 
Securitization obligations65,776 — 
Total principal amount1,540,339 1,604,187 
Less: unamortized discount and debt issuance costs(8,812)(11,336)
Total debt, net of discount and debt issuance costs1,531,527 1,592,851 
Less: current portion of long-term debt, net of debt issuance costs(71,914)(86,153)
Long-term debt$1,459,613 $1,506,698 
Maturities of long-term debt
Maturities of long-term debt were as follows as of September 30, 2024:
(in thousands)Debt obligations
2025$101,063 
2026898,500 
202765,776 
2028— 
2029475,000 
Total principal amount$1,540,339 
Revolving credit facility
As of September 30, 2024, amounts available for borrowing under our revolving credit facility were as follows:
(in thousands)Available borrowings
Revolving credit facility commitment$500,000 
Amounts drawn on revolving credit facility(209,000)
Outstanding letters of credit(1)
(7,673)
Net available for borrowing as of September 30, 2024
$283,327 

(1) We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our revolving credit facility.
v3.24.3
Business segment information (Tables)
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Business segment information
The following is our segment information for the quarters and nine months ended September 30, 2024 and 2023. The segment information for 2023 has been recast to reflect our current segment structure.

Quarter Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Merchant Services:
Revenue$93,531 $87,984 $288,536 $268,556 
Adjusted EBITDA17,752 17,393 58,377 53,120 
B2B Payments:
Revenue75,140 74,581 214,788 226,118 
Adjusted EBITDA15,264 16,074 42,537 44,741 
Data Solutions:
Revenue61,065 64,080 178,169 167,735 
Adjusted EBITDA17,485 15,317 48,150 38,956 
Print:
Revenue297,313 304,282 909,393 942,839 
Adjusted EBITDA97,407 98,044 282,226 298,015 
Total reportable segments:
Revenue$527,049 $530,927 $1,590,886 $1,605,248 
Adjusted EBITDA147,908 146,828 431,290 434,832 
All other:(1)
Revenue1,395 6,917 10,329 49,648 
Adjusted EBITDA448 4,130 5,672 22,170 
Total:
Revenue$528,444 $537,844 $1,601,215 $1,654,896 
Adjusted EBITDA148,356 150,958 436,962 457,002 

(1) Includes our North American web hosting and logo design businesses, which were sold in June 2023, and our payroll and human resources services business, which we are in the process of exiting (Note 6).
Reconciliation of adjusted EBITDA to income before income taxes
The following table presents the reconciliation of total segment adjusted EBITDA to consolidated income (loss) before income taxes:
Quarter Ended
September 30,		Nine Months Ended
September 30,
(in thousands)2024202320242023
Total segment adjusted EBITDA$148,356 $150,958 $436,962 $457,002 
Corporate operations(43,454)(49,068)(128,217)(146,304)
Depreciation and amortization expense(44,277)(38,857)(127,716)(124,985)
Interest expense(29,905)(32,034)(90,910)(93,982)
Net income attributable to non-controlling interest38 26 103 80 
Asset impairment charge(6,700)— (6,700)— 
Restructuring and integration expense(11,265)(29,364)(37,031)(70,935)
Share-based compensation expense(4,842)(4,539)(14,972)(15,889)
Certain legal-related benefit (expense)350 (1,949)50 (2,195)
Gain (loss) on sale of businesses and long-lived assets5,208 (4,324)29,190 17,618 
Income (loss) before income taxes$13,509 $(9,151)$60,759 $20,410 
Revenue disaggregated by product and service offerings
The following tables present revenue disaggregated by our product and service offerings:
Quarter Ended September 30, 2024
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $176,827 $— $176,827 
Merchant services93,531 — — — — 93,531 
Promotional solutions— — — 61,264 — 61,264 
Forms and other business products— — — 59,222 — 59,222 
Treasury management solutions
— 58,574 — — — 58,574 
Data-driven marketing— — 56,520 — — 56,520 
Other— 16,566 4,545 — 1,395 22,506 
Total revenue$93,531 $75,140 $61,065 $297,313 $1,395 $528,444 
Quarter Ended September 30, 2023
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
other		Consolidated
Checks$— $— $— $179,990 $— $179,990 
Merchant services87,984 — — — — 87,984 
Promotional solutions— — — 62,309 — 62,309 
Forms and other business products— — — 61,983 — 61,983 
Treasury management solutions
— 59,224 — — — 59,224 
Data-driven marketing— — 59,561 — — 59,561 
Other— 15,357 4,519 — 6,917 26,793 
Total revenue$87,984 $74,581 $64,080 $304,282 $6,917 $537,844 
Nine Months Ended September 30, 2024
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $534,672 $— $534,672 
Merchant services288,536 — — — — 288,536 
Promotional solutions— — — 193,343 — 193,343 
Forms and other business products— — — 181,378 — 181,378 
Treasury management solutions
— 169,000 — — — 169,000 
Data-driven marketing— — 163,339 — — 163,339 
Other— 45,788 14,830 — 10,329 70,947 
Total revenue$288,536 $214,788 $178,169 $909,393 $10,329 $1,601,215 
Nine Months Ended September 30, 2023
(in thousands)Merchant ServicesB2B
Payments		Data
Solutions		PrintAll
Other		Consolidated
Checks$— $— $— $545,061 $— $545,061 
Merchant services268,556 — — — — 268,556 
Promotional solutions— — — 203,542 1,456 204,998 
Forms and other business products— — — 194,236 — 194,236 
Treasury management solutions— 180,864 — — — 180,864 
Data-driven marketing— — 153,346 — — 153,346 
Other— 45,254 14,389 — 48,192 107,835 
Total revenue$268,556 $226,118 $167,735 $942,839 $49,648 $1,654,896 
v3.24.3
Supplemental balance sheet and cash flow information (trade accounts receivable, allowance for credit losses) (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Trade accounts receivable      
Trade accounts receivable - gross $ 183,466   $ 197,546
Allowance for credit losses (11,206)   (6,541)
Trade accounts receivable - net [1] 172,260   191,005
Unbilled receivables 61,416   $ 43,673
Changes in allowance for credit losses      
Balance, beginning of year 6,541 $ 4,182  
Bad debt expense 12,040 5,191  
Write-offs and other (7,375) (2,774)  
Balance, end of period $ 11,206 $ 6,599  
[1] Includes unbilled receivables of $61,416 as of September 30, 2024 and $43,673 as of December 31, 2023.
v3.24.3
Supplemental balance sheet and cash flow information (inventories and supplies) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Inventories and supplies    
Finished and semi-finished goods $ 34,425 $ 34,194
Raw materials and supplies 17,230 17,339
Reserve for excess and obsolete items (12,053) (9,445)
Inventories and supplies, net of reserve $ 39,602 $ 42,088
v3.24.3
Supplemental balance sheet and cash flow information (available-for-sale debt securities) (Details)
$ in Thousands
Dec. 31, 2023
USD ($)
Available-for-sale debt securities [Line Items]  
Cost $ 22,000
Gross unrealized gains 0
Gross unrealized losses 0
Fair value 22,000
Cash and cash equivalents [Member] | Money market securities [Member] | Domestic [Member]  
Available-for-sale debt securities [Line Items]  
Cost 22,000
Gross unrealized gains 0
Gross unrealized losses 0
Fair value $ 22,000
v3.24.3
Supplemental balance sheet and cash flow information (revenue in excess of billings) (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Revenue in excess of billings    
Conditional right to receive consideration $ 15,745 $ 20,680
Unconditional right to receive consideration [1] 14,178 5,427
Revenue in excess of billings $ 29,923 $ 26,107
[1] Represents revenues that are earned but not currently billable under the related contract terms.
v3.24.3
Supplemental balance sheet and cash flow information (intangibles) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Amortizable intangibles [Line Items]          
Gross carrying amount $ 1,128,226   $ 1,128,226   $ 1,166,934
Accumulated amortization (790,413)   (790,413)   (775,190)
Net carrying amount 337,813   337,813   391,744
Amortization of intangibles 38,626 $ 34,941 111,690 $ 110,017  
Estimated future amortization expense          
Remainder of 2024 32,230   32,230    
2025 101,851   101,851    
2026 72,200   72,200    
2027 43,530   43,530    
2028 27,115   27,115    
Internal-use software [Member]          
Amortizable intangibles [Line Items]          
Gross carrying amount 596,355   596,355   554,825
Accumulated amortization (453,331)   (453,331)   (412,364)
Net carrying amount 143,024   143,024   142,461
Acquired intangibles     $ 56,163    
Acquired intangibles, weighted-average useful life (in years)     3 years    
Customer lists/relationships [Member]          
Amortizable intangibles [Line Items]          
Gross carrying amount 345,208   $ 345,208   363,298
Accumulated amortization (247,963)   (247,963)   (235,557)
Net carrying amount 97,245   97,245   127,741
Partner relationships [Member]          
Amortizable intangibles [Line Items]          
Gross carrying amount 75,396   75,396   74,911
Accumulated amortization (17,660)   (17,660)   (14,031)
Net carrying amount 57,736   57,736   60,880
Technology-based intangibles [Member]          
Amortizable intangibles [Line Items]          
Gross carrying amount 65,700   65,700   97,633
Accumulated amortization (27,783)   (27,783)   (54,251)
Net carrying amount 37,917   37,917   43,382
Trade names [Member]          
Amortizable intangibles [Line Items]          
Gross carrying amount 39,367   39,367   39,367
Accumulated amortization (38,716)   (38,716)   (23,792)
Net carrying amount 651   651   15,575
Trade names [Member] | Modification of useful life [Member]          
Amortizable intangibles [Line Items]          
Amortization of intangibles 6,674   13,349    
Software to be sold [Member]          
Amortizable intangibles [Line Items]          
Gross carrying amount 6,200   6,200   36,900
Accumulated amortization (4,960)   (4,960)   (35,195)
Net carrying amount $ 1,240   $ 1,240   $ 1,705
v3.24.3
Supplemental balance sheet and cash flow information (goodwill) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Goodwill [Roll Forward]            
Goodwill, beginning of year   $ 1,430,590   $ 1,430,590    
Asset impairment charge (Note 6) $ (6,700) 0 $ 0 (6,700) $ 0  
Currency translation adjustment       (29)    
Goodwill, end of period 1,423,861     1,423,861    
Operating segments [Member] | Merchant Services [Member]            
Goodwill [Roll Forward]            
Goodwill, beginning of year   727,688   727,688    
Goodwill, end of period 727,688     727,688    
Operating segments [Member] | B2B Payments [Member]            
Goodwill [Roll Forward]            
Goodwill, beginning of year   160,431   160,431    
Goodwill, end of period 160,431     160,431    
Operating segments [Member] | Data Solutions [Member]            
Goodwill [Roll Forward]            
Goodwill, beginning of year   40,804   40,804    
Goodwill, end of period [1] 40,804     40,804    
Goodwill accumulated impairment charges 145,584     145,584   $ 145,584
Operating segments [Member] | Print [Member]            
Goodwill [Roll Forward]            
Goodwill, beginning of year   493,924   493,924    
Currency translation adjustment       (29)    
Goodwill, end of period [1] 493,895     493,895    
Goodwill accumulated impairment charges 193,699     193,699   $ 193,699
Operating segments [Member] | All Other [Member]            
Goodwill [Roll Forward]            
Goodwill, beginning of year   $ 7,743   7,743    
Asset impairment charge (Note 6)       (6,700)    
Goodwill, end of period [1] 1,043     1,043    
Goodwill accumulated impairment charges $ 6,700     $ 6,700    
[1] (1) The Data Solutions and Print balances are net of accumulated impairment charges of $145,584 and $193,699, respectively, for each period. All Other is net of accumulated impairment charges of $6,700 as of September 30, 2024
v3.24.3
Supplemental balance sheet and cash flow information (other non-current assets) (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Other non-current assets      
Postretirement benefit plan asset $ 101,211   $ 94,939
Cloud computing arrangements implementation costs 44,409   59,234
Prepaid product discounts [1] 35,834   40,376
Deferred contract acquisition costs [2] 17,995   21,103
Loans and notes receivable from distributors, net of allowance for credit losses [3] 11,635   12,443
Other 23,909   23,087
Other non-current assets 234,993   251,182
Amortization of prepaid product discounts 24,844 $ 25,291  
Amortization of deferred contract acquisition costs 9,445 8,088  
Loans and notes receivable from distributors, current 1,678   $ 987
Loans and notes receivable from distributors [Member]      
Loans and notes receivable from distributors, allowance for credit losses [Line Items]      
Balance, beginning of year 928 1,024  
Bad debt expense (benefit) 184 (46)  
Balance, end of period 1,112 $ 978  
Write-offs 0    
Recoveries 0    
Loans and notes receivable from distributors, credit quality information      
2024 943    
2023 328    
2020 895    
2019 324    
Prior 11,935    
Total 14,425    
Loans and notes receivable from distributors [Member] | 1-2 internal grade member [Member]      
Loans and notes receivable from distributors, credit quality information      
2024 943    
2023 328    
2020 895    
2019 324    
Prior 11,223    
Total 13,713    
Loans and notes receivable from distributors [Member] | 3-4 internal grade [Member]      
Loans and notes receivable from distributors, credit quality information      
2024 0    
2023 0    
2020 0    
2019 0    
Prior 712    
Total $ 712    
[1] Amortization of prepaid product discounts was $24,844 for the nine months ended September 30, 2024 and $25,291 for the nine months ended September 30, 2023.
[2] Amortization of deferred contract acquisition costs was $9,445 for the nine months ended September 30, 2024 and $8,088 for the nine months ended September 30, 2023.
[3] Amount includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,678 as of September 30, 2024 and $987 as of December 31, 2023.
v3.24.3
Supplemental balance sheet and cash flow information (accrued liabilities, supplemental cash flow information) (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Accrued liabilities        
Deferred revenue [1] $ 22,885   $ 35,343  
Employee bonuses, including sales incentives 32,308   49,446  
Interest 15,063   10,481  
Operating lease liabilities 12,674   13,562  
Income taxes 12,659   7,558  
Customer rebates 11,313   12,718  
Wages and payroll liabilities, including vacation 11,269   8,605  
Restructuring 2,936   9,689  
Prepaid product discounts 1,775   4,477  
Other 29,149   39,548  
Accrued liabilities 152,031   191,427  
Deferred revenue recognized 30,707 $ 37,972    
Supplemental cash flow information        
Cash and cash equivalents 41,307 42,189 71,962  
Restricted cash and restricted cash equivalents included in funds held for customers $ 41,258 $ 143,893    
Restricted cash and restricted cash equivalents included in funds held for customers [Extensible Enumeration] Funds held for customers Funds held for customers    
Non-current restricted cash included in other non-current assets $ 3,030 $ 2,907 2,937  
Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 85,595 $ 188,989 $ 458,033 $ 337,415
[1] Revenue recognized for amounts included in deferred revenue at the beginning of the period was $30,707 for the nine months ended September 30, 2024 and $37,972 for the nine months ended September 30, 2023.
v3.24.3
Earnings (loss) per share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Earnings (loss) per share - basic:        
Net income (loss) $ 8,969 $ (7,957) $ 40,296 $ 11,224
Net income attributable to non-controlling interest (38) (26) (103) (80)
Net income (loss) attributable to Deluxe 8,931 (7,983) 40,193 11,144
Income allocated to participating securities (3) (9) (15) (29)
Income (loss) attributable to Deluxe available to common shareholders $ 8,928 $ (7,992) $ 40,178 $ 11,115
Weighted-average shares outstanding 44,250 43,663 44,106 43,498
Earnings (loss) per share - basic $ 0.20 $ (0.18) $ 0.91 $ 0.26
Earnings (loss) per share - diluted:        
Net income (loss) $ 8,969 $ (7,957) $ 40,296 $ 11,224
Net income attributable to non-controlling interest (38) (26) (103) (80)
Net income (loss) attributable to Deluxe 8,931 (7,983) 40,193 11,144
Income allocated to participating securities (3) (9) (12) (29)
Re-measurement of share-based awards classified as liabilities (7) 0 (45) 0
Income (loss) attributable to Deluxe available to common shareholders $ 8,921 $ (7,992) $ 40,136 $ 11,115
Weighted-average shares outstanding 44,250 43,663 44,106 43,498
Dilutive impact of potential common shares 556 0 550 273
Weighted-average shares and potential common shares outstanding 44,806 43,663 44,656 43,771
Earnings (loss) per share - diluted $ 0.20 $ (0.18) $ 0.90 $ 0.25
Antidilutive potential common shares excluded from calculation 1,205 1,450 1,205 1,450
v3.24.3
Other comprehensive income (loss) (reclassification adjustments) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Amounts reclassified from accumulated other comprehensive loss        
Prior service credit $ 355 $ 355 $ 1,066 $ 1,066
Net actuarial loss (334) (568) (1,001) (1,705)
Total amortization 21 (213) 65 (639)
Tax (expense) benefit (44) 17 (133) 49
Amortization of postretirement benefit plan items, net of tax (23) (196) (68) (590)
Realized gain on cash flow hedges 830 984 2,640 2,191
Tax expense (223) (264) (712) (588)
Realized gain on cash flow hedges, net of tax 607 720 1,928 1,603
Currency translation adjustment 0 0 0 863 [1]
Total reclassifications, net of tax $ 584 $ 524 $ 1,860 $ 150
[1] Relates to the sale of our North American web hosting business during the quarter ended June 30, 2023 (Note 6).
v3.24.3
Other comprehensive income (loss) (accumulated other comprehensive loss) (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Postretirement benefit plans [Member]    
Accumulated other comprehensive loss [Line Items]    
Balance, beginning of period $ (19,824) $ (26,872)
Other comprehensive income (loss) before reclassifications 0 0
Amounts reclassified from accumulated other comprehensive loss 68 590
Net current-period other comprehensive income (loss) 68 590
Balance, end of period (19,756) (26,282)
Net unrealized loss on debt securities [Member]    
Accumulated other comprehensive loss [Line Items]    
Balance, beginning of period   (909)
Other comprehensive income (loss) before reclassifications [1]   (183)
Amounts reclassified from accumulated other comprehensive loss   0
Net current-period other comprehensive income (loss)   (183)
Balance, end of period   (1,092)
Unrealized loss on debt securities arising during the period, tax benefit   (63)
Net unrealized (loss) gain on cash flow hedges [Member]    
Accumulated other comprehensive loss [Line Items]    
Balance, beginning of period (286) 2,593
Other comprehensive income (loss) before reclassifications (1,013) [2] 8,487 [3]
Amounts reclassified from accumulated other comprehensive loss (1,928) (1,603)
Net current-period other comprehensive income (loss) (2,941) 6,884
Balance, end of period (3,227) 9,477
Unrealized (loss) gain on cash flow hedges arising during the period, tax (benefit) expense (375) 3,114
Currency translation adjustment [Member]    
Accumulated other comprehensive loss [Line Items]    
Balance, beginning of period (9,918) (12,076)
Other comprehensive income (loss) before reclassifications (951) 460
Amounts reclassified from accumulated other comprehensive loss 0 863
Net current-period other comprehensive income (loss) (951) 1,323
Balance, end of period (10,869) (10,753)
Accumulated other comprehensive loss [Member]    
Accumulated other comprehensive loss [Line Items]    
Balance, beginning of period (30,028) (37,264)
Other comprehensive income (loss) before reclassifications (1,964) 8,764
Amounts reclassified from accumulated other comprehensive loss (1,860) (150)
Net current-period other comprehensive income (loss) (3,824) 8,614
Balance, end of period $ (33,852) $ (28,650)
[1] Other comprehensive loss before reclassifications is net of an income tax benefit of $63.
[2] Other comprehensive loss before reclassifications is net of an income tax benefit of $375.
[3] Other comprehensive income before reclassifications is net of income tax expense of $3,114.
v3.24.3
Divestitures (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2023
Sep. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Divestitures [Line Items]              
Total revenue   $ 528,444   $ 537,844 $ 1,601,215 $ 1,654,896  
Gain (loss) on sale of businesses and long-lived assets   5,208   (4,324) 29,190 17,618  
Goodwill impairment charge   6,700 $ 0 0 6,700 0  
Goodwill   1,423,861     1,423,861   $ 1,430,590
North American web hosting and logo design businesses [Member]              
Divestitures [Line Items]              
Total revenue             28,000
Gain (loss) on sale of businesses and long-lived assets           $ 17,486  
Cash proceeds from business exit $ 31,230            
North American web hosting and logo design businesses [Member] | AmountOfAdjustmentToPriorPeriodGainOnDisposalMember [Member]              
Divestitures [Line Items]              
Gain (loss) on sale of businesses and long-lived assets       $ (4,457)      
Payroll and human resource services business              
Divestitures [Line Items]              
Total revenue             $ 27,000
Gain (loss) on sale of businesses and long-lived assets   5,208     28,190    
Cash proceeds from business exit         18,321    
Goodwill impairment charge   6,700          
Goodwill   $ 1,043     1,043    
Customer lists/relationships [Member]              
Divestitures [Line Items]              
Gain (loss) on sale of businesses and long-lived assets         $ 1,000    
v3.24.3
Derivative financial instruments (Details) - USD ($)
$ in Thousands
 9 Months Ended
Jun. 01, 2021
Sep. 30, 2024
Dec. 31, 2023
Jun. 20, 2023
Mar. 20, 2023
Sep. 20, 2022
Credit facility agreement [Member] | Minimum [Member]            
Derivative [Line Items]            
Interest rate margin on variable-rate debt 1.50% 1.50%        
Credit facility agreement [Member] | Maximum [Member]            
Derivative [Line Items]            
Interest rate margin on variable-rate debt 2.50% 2.50%        
Amortizing interest rate swap June 2023            
Derivative [Line Items]            
Notional amount       $ 222,932    
Interest rate [1]       4.249%    
Fair value asset / (liability), other non-current liabilities   $ (3,500) $ (2,158)      
Interest rate swap March 2023            
Derivative [Line Items]            
Notional amount         $ 200,000  
Interest rate [1]         4.003%  
Fair value asset / (liability), other non-current assets     287      
Fair value asset / (liability), other non-current liabilities   (807)        
Interest rate swap September 2022            
Derivative [Line Items]            
Notional amount           $ 300,000
Interest rate [1]           3.99%
Fair value asset / (liability), other non-current assets     $ 1,519      
Fair value asset / (liability), accrued liabilities   $ (73)        
[1] In addition, an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, is paid on amounts outstanding under our credit facility (Note 12).
v3.24.3
Fair value measurements (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Fair value measurements [Line Items]            
Goodwill impairment charge $ 6,700 $ 0 $ 0 $ 6,700 $ 0  
Derivative assets (Note 7) [Extensible Enumeration]           Other non-current assets
Derivative Liability (Note 7) [Extensible Enumeration] Accrued liabilities, Other non-current liabilities     Accrued liabilities, Other non-current liabilities   Other non-current liabilities
Derivative assets (Note 7)           $ 1,806
Derivative liability (Note 7) $ (4,380)     $ (4,380)   (2,158)
Cash, fair value           22,000
Restricted cash, carrying value 3,030   $ 2,907 3,030 $ 2,907 2,937
Restricted cash, fair value 3,030     3,030   2,937
Recurring fair value measurements [Member]            
Fair value measurements [Line Items]            
Derivative assets (Note 7)           1,806
Derivative liability (Note 7) (4,380)     (4,380)   (2,158)
Non-recurring fair value measurement [Member]            
Fair value measurements [Line Items]            
Goodwill impairment charge 0          
Quoted prices in active markets for identical assets (Level 1) [Member]            
Fair value measurements [Line Items]            
Restricted cash, fair value 3,030     3,030   2,937
Significant other observable inputs (Level 2) [Member] | Recurring fair value measurements [Member]            
Fair value measurements [Line Items]            
Derivative assets (Note 7)           1,806
Derivative liability (Note 7) (4,380)     (4,380)   (2,158)
Funds held for customers [Member]            
Fair value measurements [Line Items]            
Cash, carrying value 41,258     41,258   383,134
Cash, fair value 41,258     41,258   383,134
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]            
Fair value measurements [Line Items]            
Cash, fair value 41,258     41,258   383,134
Other current and noncurrent assets [Member]            
Fair value measurements [Line Items]            
Loans and notes receivable from distributors 13,314     13,314   13,430
Loans and notes receivable from distributors, fair value 14,278     14,278   13,249
Other current and noncurrent assets [Member] | Significant unobservable inputs (Level 3) [Member]            
Fair value measurements [Line Items]            
Loans and notes receivable from distributors, fair value 14,278     14,278   13,249
Cash and cash equivalents [Member]            
Fair value measurements [Line Items]            
Cash, carrying value 41,307     41,307   49,962
Cash, fair value 41,307     41,307   49,962
Cash and cash equivalents [Member] | Money market securities [Member]            
Fair value measurements [Line Items]            
Cash equivalents           22,000
Cash and cash equivalents [Member] | Money market securities [Member] | Recurring fair value measurements [Member]            
Fair value measurements [Line Items]            
Cash, fair value           22,000
Cash and cash equivalents [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]            
Fair value measurements [Line Items]            
Cash, fair value 41,307     41,307   49,962
Cash and cash equivalents [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market securities [Member] | Recurring fair value measurements [Member]            
Fair value measurements [Line Items]            
Cash, fair value           22,000
Current portion of long-term debt and long-term debt [Member]            
Fair value measurements [Line Items]            
Long-term debt 1,531,527     1,531,527   1,592,851
Long-term debt, fair value 1,515,895     1,515,895   1,554,028
Current portion of long-term debt and long-term debt [Member] | Significant other observable inputs (Level 2) [Member]            
Fair value measurements [Line Items]            
Long-term debt, fair value 1,515,895     $ 1,515,895   $ 1,554,028
Payroll and human resource services business            
Fair value measurements [Line Items]            
Goodwill impairment charge $ 6,700          
v3.24.3
Restructuring and integration expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 18 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Restructuring and integration expense [Line Items]          
Restructuring and integration expense $ 11,265 $ 29,364 $ 37,031 $ 70,935  
Total cost of revenue [Member]          
Restructuring and integration expense [Line Items]          
Restructuring and integration expense 234 6,429 1,132 10,868  
Operating expenses [Member]          
Restructuring and integration expense [Line Items]          
Restructuring and integration expense 11,031 22,935 35,899 60,067  
North Star program [Member]          
Restructuring and integration expense [Line Items]          
Restructuring and integration expense 11,000 20,000 33,000 35,000 $ 80,000
Anticipated additional restructuring and integration expense 30,000   30,000   $ 30,000
External consulting and other costs [Member]          
Restructuring and integration expense [Line Items]          
Restructuring and integration expense 8,614 10,939 25,733 31,561  
Employee severance benefits [Member]          
Restructuring and integration expense [Line Items]          
Restructuring and integration expense     2,961    
Restructuring charges, net 902 11,179 2,459 17,526  
Internal labor [Member]          
Restructuring and integration expense [Line Items]          
Restructuring and integration expense 381 2,469 1,602 6,341  
Other [Member]          
Restructuring and integration expense [Line Items]          
Restructuring and integration expense $ 1,368 $ 4,777 $ 7,237 $ 15,507  
v3.24.3
Restructuring and integration expense (accruals) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Restructuring Cost and Reserve [Line Items]        
Balance, December 31, 2023     $ 9,689  
Charges $ 11,265 $ 29,364 37,031 $ 70,935
Balance, September 30, 2024 2,936   2,936  
Employee severance benefits [Member]        
Restructuring Cost and Reserve [Line Items]        
Balance, December 31, 2023     9,689  
Charges     2,961  
Reversals     (502)  
Payments     (9,212)  
Balance, September 30, 2024 $ 2,936   $ 2,936  
v3.24.3
Income tax provision (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Income Tax Disclosure [Abstract]          
Effective income tax rate 33.60% 13.00% 33.70% 45.00% 34.10%
v3.24.3
Postretirement benefits (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Net periodic benefit income        
Interest cost $ 435 $ 496 $ 1,306 $ 1,489
Expected return on plan assets (2,099) (1,830) (6,296) (5,490)
Amortization of prior service credit (355) (355) (1,066) (1,066)
Amortization of net actuarial losses 334 568 1,001 1,705
Net periodic benefit income $ (1,685) $ (1,121) $ (5,055) $ (3,362)
v3.24.3
Debt (Details)
$ in Thousands
 3 Months Ended 9 Months Ended 20 Months Ended
Jun. 01, 2021
USD ($)
Mar. 31, 2026
USD ($)
Dec. 31, 2025
USD ($)
Sep. 30, 2025
USD ($)
Jun. 30, 2025
USD ($)
Mar. 31, 2025
USD ($)
Sep. 30, 2024
USD ($)
Jun. 01, 2026
USD ($)
Mar. 13, 2024
USD ($)
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Debt instruments [Line Items]                      
Total principal amount             $ 1,540,339     $ 1,604,187  
Less: unamortized discount and debt issuance costs             (8,812)     (11,336)  
Total debt, net of discount and debt issuance costs             1,531,527     1,592,851  
Less: current portion of long-term debt, net of debt issuance costs             (71,914)     (86,153)  
Long-term debt             1,459,613     1,506,698  
Maturities of long-term debt                      
2025             101,063        
2026             898,500        
2027             65,776        
2028             0        
2029             475,000        
Senior, secured revolving credit facility [Member]                      
Debt instruments [Line Items]                      
Total principal amount             209,000     252,000  
Credit facility, commitment $ 500,000           500,000        
Net available for borrowing as of September 30, 2024             283,327        
Senior, secured term loan facility [Member]                      
Debt instruments [Line Items]                      
Total principal amount 1,155,000           790,563     $ 877,187  
Senior, secured term loan facility [Member] | Forecast [Member]                      
Debt instruments [Line Items]                      
Repayment amount   $ 28,875 $ 28,875 $ 28,875 $ 21,656 $ 21,656          
Swingline sub-facility [Member]                      
Debt instruments [Line Items]                      
Credit facility, commitment 40,000           40,000        
Letter of credit sub-facility [Member]                      
Debt instruments [Line Items]                      
Credit facility, commitment 25,000           25,000        
Outstanding letters of credit [1]             $ (7,673)        
Credit facility agreement [Member]                      
Debt instruments [Line Items]                      
Weighted-average interest rate at period end             6.60%     6.83%  
Credit facility agreement [Member] | Forecast [Member]                      
Debt instruments [Line Items]                      
Maximum consolidated total leverage ratio               4.25      
Maximum consolidated secured leverage ratio               3.50      
Minimum interest coverage ratio               3.00      
Consolidated total leverage ratio limiting permitted payments               2.75      
Permitted payments               $ 60,000      
Senior, unsecured notes [Member]                      
Debt instruments [Line Items]                      
Total principal amount $ 500,000           $ 475,000     $ 475,000  
Senior, unsecured notes                      
Stated interest rate 8.00%                    
Proceeds from debt offering, net of discount and debt issuance costs $ 490,741                    
Effective interest rate 8.30%                    
Debt settled                     $ 25,000
Securitization facility [Member]                      
Debt instruments [Line Items]                      
Total principal amount             65,776     $ 0  
Credit facility, commitment             $ 80,000   $ 80,000    
Weighted-average interest rate at period end             6.64%        
Minimum [Member] | Credit facility agreement [Member]                      
Debt instruments [Line Items]                      
Interest rate margin on variable-rate debt 1.50%           1.50%        
Maximum [Member] | Credit facility agreement [Member]                      
Debt instruments [Line Items]                      
Interest rate margin on variable-rate debt 2.50%           2.50%        
[1] We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states. These letters of credit reduce the amount available for borrowing under our revolving credit facility.
v3.24.3
Other commitments and contingencies (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]    
Self-insurance liabilities $ 9,047 $ 9,024
v3.24.3
Shareholders' equity (Details) - USD ($)
shares in Thousands, $ in Thousands
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Oct. 24, 2018
Stockholders' Equity Note [Abstract]      
Share repurchase program, authorized amount     $ 500,000
Common shares repurchased (in shares) 0 0  
Amount remaining under share repurchase authorization $ 287,452    
v3.24.3
Business segment information (Details)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
USD ($)
Mar. 31, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
customers
Sep. 30, 2023
USD ($)
customers
Business segment information [Line Items]          
Revenue $ 528,444   $ 537,844 $ 1,601,215 $ 1,654,896
Depreciation and amortization expense (44,277)   (38,857) (127,716) (124,985)
Interest expense (29,905)   (32,034) (90,910) (93,982)
Net income attributable to non-controlling interest 38   26 103 80
Asset impairment charge (6,700) $ 0 0 (6,700) 0
Restructuring and integration expense (11,265)   (29,364) (37,031) (70,935)
Share-based compensation expense (4,842)   (4,539) (14,972) (15,889)
Certain legal-related benefit (expense) 350   (1,949) 50 (2,195)
Gain (loss) on sale of businesses and long-lived assets 5,208   (4,324) 29,190 17,618
Income (loss) before income taxes 13,509   (9,151) 60,759 20,410
Operating segments [Member]          
Business segment information [Line Items]          
Adjusted EBITDA 148,356   150,958 436,962 457,002
Operating segments [Member] | Merchant Services [Member]          
Business segment information [Line Items]          
Revenue 93,531   87,984 288,536 268,556
Adjusted EBITDA 17,752   17,393 58,377 53,120
Operating segments [Member] | B2B Payments [Member]          
Business segment information [Line Items]          
Revenue 75,140   74,581 214,788 226,118
Adjusted EBITDA 15,264   16,074 42,537 44,741
Operating segments [Member] | Data Solutions [Member]          
Business segment information [Line Items]          
Revenue 61,065   64,080 178,169 167,735
Adjusted EBITDA 17,485   15,317 48,150 38,956
Operating segments [Member] | Print [Member]          
Business segment information [Line Items]          
Revenue 297,313   304,282 909,393 942,839
Adjusted EBITDA 97,407   98,044 282,226 298,015
Operating segments [Member] | Total reportable segments [Member]          
Business segment information [Line Items]          
Revenue 527,049   530,927 1,590,886 1,605,248
Adjusted EBITDA 147,908   146,828 431,290 434,832
Operating segments [Member] | All Other [Member]          
Business segment information [Line Items]          
Revenue [1] 1,395   6,917 10,329 49,648
Adjusted EBITDA [1] 448   4,130 5,672 22,170
Asset impairment charge       (6,700)  
Corporate operations [Member]          
Business segment information [Line Items]          
Adjusted EBITDA $ (43,454)   $ (49,068) $ (128,217) $ (146,304)
Customer concentration risk [Member]          
Business segment information [Line Items]          
Number of customers | customers       0 0
Customer concentration risk [Member] | Total revenue benchmark [Member] | Major Customers [Member]          
Business segment information [Line Items]          
Concentration risk, percentage       10.00% 10.00%
[1] Includes our North American web hosting and logo design businesses, which were sold in June 2023, and our payroll and human resources services business, which we are in the process of exiting (Note 6).
v3.24.3
Business segment information (disaggregated revenue information) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Disaggregated revenue information        
Revenue $ 528,444 $ 537,844 $ 1,601,215 $ 1,654,896
Merchant Services [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 93,531 87,984 288,536 268,556
B2B Payments [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 75,140 74,581 214,788 226,118
Data Solutions [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 61,065 64,080 178,169 167,735
Print [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 297,313 304,282 909,393 942,839
All Other [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue [1] 1,395 6,917 10,329 49,648
Checks [Member]        
Disaggregated revenue information        
Revenue 176,827 179,990 534,672 545,061
Checks [Member] | Print [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 176,827 179,990 534,672 545,061
Merchant services [Member]        
Disaggregated revenue information        
Revenue 93,531 87,984 288,536 268,556
Merchant services [Member] | Merchant Services [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 93,531 87,984 288,536 268,556
Promotional solutions [Member]        
Disaggregated revenue information        
Revenue 61,264 62,309 193,343 204,998
Promotional solutions [Member] | Print [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 61,264 62,309 193,343 203,542
Promotional solutions [Member] | All Other [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue       1,456
Forms and other business products [Member]        
Disaggregated revenue information        
Revenue 59,222 61,983 181,378 194,236
Forms and other business products [Member] | Print [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 59,222 61,983 181,378 194,236
Treasury management solutions [Member]        
Disaggregated revenue information        
Revenue 58,574 59,224 169,000 180,864
Treasury management solutions [Member] | B2B Payments [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 58,574 59,224 169,000 180,864
Data-driven marketing [Member]        
Disaggregated revenue information        
Revenue 56,520 59,561 163,339 153,346
Data-driven marketing [Member] | Data Solutions [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 56,520 59,561 163,339 153,346
Other [Member]        
Disaggregated revenue information        
Revenue 22,506 26,793 70,947 107,835
Other [Member] | B2B Payments [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 16,566 15,357 45,788 45,254
Other [Member] | Data Solutions [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue 4,545 4,519 14,830 14,389
Other [Member] | All Other [Member] | Operating segments [Member]        
Disaggregated revenue information        
Revenue $ 1,395 $ 6,917 $ 10,329 $ 48,192
[1] Includes our North American web hosting and logo design businesses, which were sold in June 2023, and our payroll and human resources services business, which we are in the process of exiting (Note 6).
Deluxe (NYSE:DLX)
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過去 株価チャート
から 12 2023 まで 12 2024 Deluxeのチャートをもっと見るにはこちらをクリック